Source Talks is a series where we discuss deal origination with PE and M&A pros, in collaboration with David M. Toll.
In this episode David speaks with Matt Metalios, Senior Associate, Business Development at Veronis, Suhler, Stevenson, about their investment strategy and how they leverage technology to manage their multi-channel deal origination strategy to achieve their investment targets.
Machine generated transcript below:
Matt, tell us a little bit about VSS and the kind of investing that you do there. Sure.
VSS is a private investment firm based in New York City, focused on the lower middle market investments in health care, education and tech enabled business services companies. The structured capital approach allows us to be flexible with how we potentially partner with the business. So we have the flexibility to do change of control transactions, minority investments, as well as invest equity debt or a combination of both.
Tell us about how you do find deals there, how you how you originate opportunities.
Our sourcing process is multifaceted with how we discover new opportunities, so we spend time with investment banks going to companies directly, the independent sponsor, community, other committed funds, as well as transaction professionals such as attorneys.
Tell us about the role that technology plays in your origination efforts.
So technology plays a sizable role in our efforts here at VSS when it comes to origination. Everything from data integrity to relationship management to company identification, as well as having scalable outreach to that audience that you want to reach. We utilize technology tools such as Sutton Place Strategies, when it comes to identifying who are relevant sell-side relationships that we don’t have currently. So with Sutton Place, for example, it’s a great resource when I’m able to understand when a new market participant that spends time in our sectors emerges if they’ve worked on any relevant deals as well as how I can get in contact with them. So a lot of that research work into identifying who is a great fit set in place gives me a tremendous amount of time when it comes to identifying those folks.
I know you’ve been very busy and closed I think you said earlier four platforms in just the last six months. Take us through one of these recent deals and tell us how it originated and how you found it.
Sure. So, yes, we’ve been very busy throughout the pandemic. One of our most recent transactions and deals was a business in the education space called really great reading. And this is a business that we met years ago, given we’ve been in the education content space for over a decade. So our conversation started years ago.
Timing wasn’t great, but we were able to build a relationship. And when the company was in size and was interested in doing a transaction, we were top of mind. The business was at an inflection point. It was growing very well, but they were getting to a certain size where they believe that bringing on an institutional partner can help them with that next stage of growth. So ultimately, given our experience with businesses such as cambium, where you can be kids, they thought we could be a great partner to help them continue to expand and to reach that next stage of goals.