The scale and velocity of the current shift in mining technology investment has caught a lot of people by surprise. But not the team at a leading international mintech advisory firm.
Atrico managing director Ivan Gustavino, co-directors Kheong Chee and Jason Price, and their expanding team have been working closely with leading technology firms, and also with savvy investors in the space, for more than 20 years.
The work, centred on formulation and execution of value-based strategies, has seen them advise more than 250 companies on growth, mergers and acquisitions, and trade sales since Atrico set up shop in 1995. Racking up more than 80 assignments in the mintech area, and over 10 of the most recent significant transactions in the space, they are among the most experienced and respected names in the business.
Atrico has been a constant factor in many of the best deals done in the mining technology space in the past 15 years.
These have included transactions such as the majority buyout of INX Software by Tanarra Capital, the sale of Mining Information Systems to Trimble Navigation, the sale of ioGlobal to Imdex, and Caterpillar subsidiary Progress Rail’s acquisition of Inspired Systems.
Atrico’s managing director helped build one of the industry’s most successful mining software enterprises, Surpac, in the 1980s and 90s. The company’s intimate understanding of mining technologies and the industry value chain, which can be traced back to those origins, has been central to its rise into the ranks of the world’s leading mining technology company advisors.
Ivan Gustavino says the company also worked extensively with oil and gas, telecommunications and other industry sector groups, on both the sell and buy side of assignments and deals.
Atrico has assisted clients on the sell side to identify strategic buyers and close deals on favourable terms. It has helped larger companies execute acquisition strategies and, tapping into connections with technology and equipment vendors around the world and using its vast database, it has worked with those clients to close a number of successful acquisitions.
“When we started we recognised a need inside the Australian market to understand globalisation and scaling companies that are technology focused, and there wasn’t much know-how around to do that at the time,” Gustavino says.
“We decided that we’d position ourselves as a group that could bring that know-how to the market.
“We did some work initially with venture capital companies and investment banks, on how they assessed their technology company investments. That effectively grew into an advisory service for those buy-side organisations, focused on evaluating companies pre- and post-investment.
“The pre-deal work zeroed in on the scalability of a business, markets, intellectual property and competitive positioning, what the management team looked like, what the technology was, and the overall propensity for the group to execute and scale globally. We put that all together in a risk-weighted view on the best way to make that investment.
“It was very buy-side oriented at the time, and then we were frequently being asked afterwards to advise the acquired company on growth, and to assist them in transitioning.
“These buy-side mandates gave us greater insights into financing acquisitions, and the nuances of the different parties on the buy side. It certainly gave us a very good appreciation of what deals needed to look like to be valuable to both the seller and the buyer, and not just the seller, which is the direction we’d come from.
“We completed a bit of an apprenticeship, if you will, and now we understood the buy-side dynamics and why a deal needed to be good for everybody.
“When we moved back into sell-side mandates, where we knew we could help companies accelerate the international scaling many were looking to accomplish, we also had a new way of looking at how and where these companies needed to be positioned to be attractive to potential buyers as well.
“It was a holistic, corporate view of company strategy and execution; we had a money view, or view from the financing side; and, and we had that original sell-side view because we came from there – building companies operationally.”
Tools and ties
Atrico has worked closely with a number of leading technology companies to grow their value – typically by 3-10-times – and achieve successful partnering, merger and acquisition, and trade sale outcomes.
“We do this through the expertise in the group, the tools we’ve developed, and the relationships built over more than 400 engagements,” says director Kheong Chee.
“Because we did the buy-side work for five years we have the methodologies for assessing any tech company around the world, with all the geographic and geopolitical issues that sit around that. We take that macro view down to the micro view of technology architectures, IP, contracts, commercial factors.
“The current valuation is obviously important. But we are able to see what that valuation might look like in three-to-five years … in a range of scenarios and with pieces of value added through different strategic steps. So we can work with companies to build that value and position themselves in the best way.
“And reverse engineering of that end state tells us where a buyer is going to get bigger bang for their buck.
“Then we have tools for saying, if you’re in market expansion mode, how do we accelerate that?
“We’ve taken the Silicon Valley tech view, which is more consumer oriented, and we’ve fused it with our understanding of B2B and industrial technology. So we construct the go-to market plan at the operational level, with all the complexities of different countries, different marketplaces, different pricing points, and different competitive landscapes, and we then bring it up to the enterprise level, where the company must be prepared for an investor, with all the necessary contracts in place, and prepared for an exit.
“Some companies don’t know how to communicate and position effectively to allow acquirers to appreciate their value.
“We advise them on what acquirers are looking for, and how the business looks to them.”
Atrico director Jason Price adds: “Something we’ve refined as a high-value tool is our methodology for positioning a company 2-3 years out, creating value from where they are today to an exit point; drawing up the market and competitive landscape, the threats, the categories of buyers, and reversing that back so a company can see clearly where and how they should invest to build value and how one opportunity stacks up against the next.
“And that’s all documented.
“The tools we have developed are all frameworks, incorporating a combination of written and documented processes, methodologies, modelling tools and our expertise – our IP.
“We’re obviously then tying that to the corporate finance and linking those two pieces.
“Most people can’t connect the strategy and the execution through the corporate finance. And we can bring that as well through our tool-sets and our network.”
Operating out of Perth, Western Australia – one of the world’s largest mining hubs – Atrico has relationships at board or senior management levels at many of the mining technology vendors and customers worldwide.
Gustavino says the company maintains sound relationships with most of the groups it has worked with over 20 years – a network that spans the globe.
“I think if you were to talk to people – founders, principals – at many of the companies we’ve advised at some stage of their journeys, in some form of transaction, we still get on with them all, we still communicate with them, and we’re still connected with them all globally.
“That hasn’t changed,” he says.
“Our credibility and our ability to maintain the ethical line is intact. That’s important for any advisory firm, and it’s something we hold pretty dear.
“I would say we measure ourselves and our outcomes on some metrics that aren’t pure financial metrics. It’s about taking a long-term view.
“Surpac itself is still functioning today [with Dassault Systemes].
“Atrico is about creating value for shareholders today and in the future. We’re not fly-by-night advisors who just do one transaction, in and out. They’ll come and go, of course, but we see ourselves as being part of the fabric of mining tech globally.
“That’s a position and a view we think people in mining respect.”
Atrico has developed particular expertise over the past two decades in mining software (GIS, geological modelling, mine planning and scheduling, optimisation, data management, asset management, cloud computing), and mine automation and communications technologies.
The experienced Atrico team has provided strategic growth services to a number of smaller mintech firms, helped them to build and execute scalable business models; capture and defend valuable market positions; and execute an exit strategy.
Ivan Gustavino says recent transactions involving Atrico clients have seen high premiums paid for businesses that had been built into attractive targets.
“Other clients have successfully expanded into new markets, substantially improved their financial performance, and are progressing well on their exit strategy,” he says.
“I think the deals where we’ve achieved the best results have mainly been strategic deals.
“Our value-add as Atrico is working out a strategic fit: taking one plus one and turning it into three-plus, not just two.
“In the tech space there is a lot of value in companies that is not on the balance sheet, and not in the P&L.
“After you’ve done 5-7 years of proving up the technology products, which is how long it takes, the next question is often, how do I go set up offices round the world so I can go and expand and build revenue?
“It is a massive challenge to realise value globally, and we have the insight and have done that on many occasions.
“It is often a bigger challenge to find, long after a deal has been concluded, that both parties remain happy with the outcome. Where you have the founders and the shareholders who are still happy within the business that we sold them to – that is a rare cultural fit and a value fit.”
The Atrico team comprises technology entrepreneurs, and corporate finance and marketing veterans. They have advised hundreds of technology companies, and so understand the challenges faced in building scale and executing transactions. The team is led by:
Ivan Gustavino (managing director)
Ivan Gustavino, B.Bus, is a co-founder of Atrico and specialises in advising technology companies on growth and mergers and acquisitions. He started his career in software product development and moved into business development roles. He has extensive experience in running and building technology businesses, including helping to build one of the leading international mining technology companies. He has over 20 years of experience in technology and business management and has advised a large number of technology investors and businesses at the board level. Ivan obtained a business degree from Curtin University of Technology and currently holds non-executive board positions for ASX listed Imdex Ltd and CV Check Ltd.
Kheong Chee (executive director)
Kheong Chee is a co-founder of Atrico, with more than 17 years of multi-disciplinary experience in strategy and corporate advisory. His core skills are in transaction packaging and execution, corporate finance, and technology marketing. He has led assignments across a wide range of business issues including business growth strategy, mergers and acquisitions, capital raising, technology marketing, and IP licensing. Kheong has a Graduate Diploma in Applied Finance and Investment from Finsia, where he was awarded the ABN Amro Morgans Prize. He graduated top of the School of Electrical and Computer Engineering at Curtin University of Technology and co-founded his first technology company while pursuing his PhD. He subsequently did his post-doctoral research on IP protection systems at a centre co-founded by Sun Microsystems.
Jason Price (associate director)
Jason Price has more than 15 years’ experience in the investment industry including trade sales, private and public securities, licensing, and business development. He joined Atrico in 2000 and has since worked on more than 30 corporate advisory transactions and a range of strategic consulting engagements with large organisations. He holds a Bachelor of Science and PhD from UWA. He also went on to complete a Post Graduate Diploma with the Securities Institute of Australia (now FinSIA) and further studies in finance and economics.