Bridging the divide
Until now, North Ridge has taken clients who want to sell to potential buyers in the US and Europe offshore. It wants access to GP Bullhound’s team who can connect Australian and New Zealand clients with investors in the northern hemisphere.
“We kissed a lot of frogs trying to find a partner in the northern hemisphere,” Mr Sharp told The Australian Financial Review. “Until we consummated this relationship [with GP Bullhound], we would … schlep over to the US to sell businesses.”
North Ridge managing partner Christin Burns flew to the US three times this year to help with Fleet Space’s capital raising efforts. In May, the satellite operator raised $50 million, with investments from Mike Cannon-Brookes’ Grok Ventures and superannuation giant Hostplus, among others.
Mr Campbell said tech companies throughout the Asia-Pacific region needed more “specialist help” from financial advisory firms because international players were growing more interested in either buying or investing in emerging companies.
“For us, Asia is a long way away, yet close at the same time. The demographic … it is seeing more demand from entrepreneurs for specialist help. The number of unicorns is growing quickly,” Mr Campbell said.
“We have relationships in the US and Europe that have pots of capital directed to Asia.”
North Ridge and GP Bullhound’s collaboration comes after a year of interest rate rises and slowing growth that decimated tech companies’ valuations. Bigger banks, including three of Australia’s big four, are also reining in their own ambitions for VC-style operations.
While there is a seemingly endless supply of capital, Mr Sharp said the biggest challenge in tech-related mergers and acquisitions was valuing companies.
North Ridge and GP Bullhound are advising New Zealand-founded digital imagery company Magic Memories on a sale. North Ridge advised the company on a recapitalisation in 2020, when the pandemic hurt the business, and determining a valuation amid today’s rebound made dealmaking tougher.
But for some sectors in tech, such as software companies, investors remain happy to write cheques.
San Francisco-headquartered investors ICONIQ Capital and Coatue Management, for example, just picked up shares in one of Australia’s most celebrated tech unicorns, Canva. Their investments valued the software company at about $39 billion, the Financial Review’s Street Talk column reported on Tuesday.
“Valuations have not really found a level yet. That means work for an advisory firm is critical in bridging the gap between price for the buyer and seller. We need to be patient to find the right partner,” Mr Campbell said.
