2020 was quite a year. Despite unprecedented setbacks and volatility, business moved and deals took place.
On this episode of Deal Talk with 7MA, the firm’s Founding Partners Andy Johnston, Tripp Davis, and Leroy Davis review major transactions from the past year and discuss market opportunities that arose over 2020.
Despite the various challenges over the year, 7MA closed 14 deals since April and the firm increased its staff by 25%. “We're obviously very pleased and excited for our clients who are able to navigate really successful and strategic transactions,” Andy says, “and our ability to keep bringing on really exciting clients now who’re exploring the market, and certainly 2020 you know, revealed who was ready to get deals done.” It wasn’t easy to make investments given the peculiar circumstances, but those who took the risk were rewarded.
At the start of the year, the partners could not have anticipated what the world and the market would look like by December. “[COVID-19] allowed us to kind of take a step back and think through what we were going to do as a firm,” Tripp recognizes.
While the pandemic halted a range of business plans and operations, it fueled an urgent need for more digitization. “We felt like most of our clients were still well-positioned in helping industries transform digitally. And because of that, we thought we have a story to tell. And so instead of instead of bunkering down, we chose to attack,” Tripp notes.
Tune into the episode to learn more about the highlights from 2021 and the trends the Partners will be paying attention to in 2021.
Name: Andy Johnston
What he does: A Partner at 7MA, Andy has had a vast career in investment banking and advisory services.
Company: 7 Mile Advisors
Words of wisdom: “I think we've got a great capability to bringfairly strategic deals to market and really bring our experience from the digital transformation space, and apply that to both healthcare and insurance, which are two huge sectors by their own right, but are really being upended on an accelerated pace by digital transformation.”
Name: Tripp Davis
What he does: A Partner at 7MA, Tripp has more than 20 years of experience advising companies in a variety of industries on M&A and capital raising.
Company: 7 Mile Advisors
Words of wisdom: “So our clients compete on a global basis, we've always believed that we needed to bring the world to the table, and not just those buyers that were regional, or at the top of everyone's list.”
Name: Leroy Davis
What he does: A Partner at 7MA, Leroy has managed transactions in the Technology, Consumer, Insurance, Healthcare, and Infrastructure sectors.
Company: 7 Mile Advisors
Words of wisdom: “The other thing — and I say this with some humility — is that we would have kept doing what we do anyway because that’s all we know how to do. I'm just glad it worked in almost every case, and I'm sure we could get back and look at a couple deals or situations that got stalled out. But I think in almost every case, it wound up working in our favor, and hopefully it sets the stage for even further growth and opportunity.”
Top takeaways from this episode
★ The pandemic added uncertainty, but it did not pause M&A indefinitely. When social distancing was first implemented as a way to slow the spread of COVID-19, a lot of impending deals hit pause. Ultimately all the deals 7MA had been working on pre-pandemic went through — helped, in part, by the need for digital innovation.
★ M&A is truly global. Increasingly, deals are taking place with buyers and sellers from different countries, including emerging economies. Over the last few years, 7MA has worked with people in a range of non-traditional transaction centers, including Latin America and Eastern Europe.
★ Verticals with traction. 7Ma has been able to leverage its experience in digital transformation and bring strategic deals to the healthcare and insurance sectors, which both have great need for digital innovation.
[01:57] Creating a plan of action: With COVID catching everyone off guard, the partners at 7MA used the time to refocus and recognize opportunities for their clients.
[03:39] Pandemic conditions accelerated trends in the digital sphere: 7MA recognized early on that the pandemic was highlighting pre-existing themes, such as digital transformations, cloud migration, e-commerce, and industrial automation.
[04:27] Focus on the fundamentals: Although the pandemic created a lot of changes and uncertainty in the business environment, 7MA stayed true to their expertise, which proved to be helpful in an environment that required a shift towards digital transformation.
[10:33] A transaction roller coaster: The Kalypso acquisition is an example of a deal that almost didn’t go through due to market turmoil.
[13:34] Ecommerce is hot: The sale of Zilker Technology to Ernst & Young is one example of the flurry of ecommerce activity that took place last year and is likely to continue into 2021.
[14:03] The changing geography of transaction centers: Over the past five to seven years, a recurring theme has emerged, in which many transaction centers are based in Latin America or Eastern Europe, which only seems to be gaining more steam.
[15:50] Delivering a comparative advantage: Insurance and healthcare are two verticals where 7MA can leverage the services provided to Business Services and Technology firms.
[17:29] Think globally: Deals have become even more multinational; the firm has seen more buyers and sellers from different countries, including Spain and Brazil.
[21:47] Some 2020 practices might endure: While COVID requires social distancing and coming up with creative ways to bring people together, some of the virtual practices could be useful post-COVID.
☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at firstname.lastname@example.org.
Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment Banking services and advise on mergers, acquisitions, and private capital transactions around the globe.