Source Talks is a series where we discuss deal origination with expert PE and M&A pros. On this week’s episode, Vladimir Andonov of Martis Capital tells us how his team’s thematic, founder-focused investment approach and use of technology helps to win deals in a highly fragmented market.
Vladimir, start off telling us about Martis Capital and the kind of investing that you do there.
Martis Capital is a lower middle market private equity firm exclusively focused on the healthcare sector. We’re very thematic, that’s how we go to market. We started in 2011 with offices in San Francisco and DC, and we do both control and minority transactions. But principally, what really unifies us is we partner with founders to help build companies and typically from a sizing standpoint, will be 5 to 20 of EBITDA. Business development at Martis cuts across the organization, but we do have a dedicated effort that’s led by myself. It involves really starting with a very clear idea of where we want to spend time thematically, and once we have identified that we reach out to all sorts of stakeholders, including operators and executives, investment bankers that have spent time in that area to help us understand some of the trends and obviously ultimately get in front of companies. But we also do direct outreach ourselves into some of those end markets to build relations with companies that maybe are not ready to transact today, but hopefully down the road.
What role does technology play in your deal sourcing efforts there and, and how does that work?
The way we think about technology, it’s either an efficiency gain or an access to information that you otherwise wouldn’t be able to get. And I do think there are some tools including SPS that really provide both. It saves hours to really look through press releases for who advised on a certain transaction whereas with SPS you can just look it up. It’s a very targeted and efficient sort of identification of advisors in some areas that you can have discussions with, or companies that may be owners of assets that transacted three, five years ago that might be ready to transact again.
Vladimir, take us through a recent deal that helps illustrate some of your sourcing strategies and how they help you.
One of our most recent transactions called Alcanza Clinical Research. It’s a sort of manager of clinical research sites across the US with a focus on underrepresented patient populations. But the way we were able to identify this opportunity and ultimately close on it was through the relationships and our work thematically in the end market over the course of most of 2021. We were building our understanding, meeting executives, meeting companies, and ultimately got a proprietary introduction to this particular business. What’s interesting is that post-close, it being a highly fragmented end market, there’s a ripe opportunity for M&A and we have leveraged some of the SPS tools, Source Scrub tools, others to help really triage and identify where to dedicate our resources. You really have to go at it from all angles, right? Because the market’s highly fragmented and there’s a lot of competition.
Vladimir, tell us about a hidden talent or passion that you have that not too many people know about.
I speak five languages to a varying degree, having being born and raised in Bulgaria, lived for part of my childhood in Germany and then came to the States sort of in my college years. And now sort of growing the count to five today. But that sort of trickles down to the rest of my family. My kids speak more than two languages, two and a half perhaps today, but they’re only five years old.