In the 1987 film Wall Street, Gordon Gekko, a slick-talking financier played by Michael Douglas, utters one of Hollywood’s most iconic lines: “Greed, for lack of a better word, is good.”
But Alex Athanasopoulos, vice-president of investment banking at Mackie Research Capital Corp., doesnʼt subscribe to that view. Heʼd be more likely to say: “Needs are good.” Specifically, the needs of his clients.
“When people hear the term ‘investment banker,’ they always refer back to the movies,” says Athanasopoulos, who joined Mackie, one of Canada’s largest independent, fully integrated investment dealers, more than a year ago, but has over six years’ experience. “But that doesn’t give you an accurate picture of what the role is.
“What we really do is help companies with whatever their needs are, whether that’s capital, or strategic execution on a merger or an acquisition. We work with companies’ management teams on executing their business plans, and to give them the resources or capital to do that,” he says.
Although they do help private companies with their initial public offerings, Athanasopoulos and his colleagues largely focus on working with publicly traded companies across a range of industries. Their clients vary in size and stage of development, but Mackie specializes in small-capitalization, high-growth companies in emerging industries.
Athanasopoulos says he works with a lot of companies with an enterprise value of $30-million to $300-million and “high growth opportunity.” The question, he says, then becomes “what do they need?” to help them grow into a $400-million, $500-million or a $1-billion company.
Mackie works with clients to develop their business plans and understand what they need to meet their growth objectives.
A company’s needs can vary greatly from sector to sector. A bioplastics manufacturing business may require new equipment to bring certain services in-house to improve customer service. Companies in the rapidly growing cannabis industry may need to build massive new facilities in order to meet demand. Health-care and biotechnology companies, on the other hand, may want to fund basic research and development in order to commercialize their products.
“Once we understand those needs, whatever they may be, we pitch that idea to investors,” Athanasopoulos says. “We try to sell them on the long-term opportunity and growth that these companies could be facing.”
The investor pool is a mix of institutional funds (such as pension funds or mutual funds) across Canada, the United States and Europe, as well as individual retail investors and their retail advisors. Retail investors trade in smaller amounts than institutions because they’re buying for themselves, explains Athanasopoulos, which means they “play a really important part in the small-cap space, where institutional investors may have less of an interest, but are important to gain access to capital.”
He points to two recent deals, both in the clean-tech sector, as good examples of the kinds of emerging-technology firms that Mackie likes to work with.
Last September, the firm worked with Eguana Technologies Inc. The Calgary-based company designs and manufactures energy-storage systems for residential and small commercial customers that are connected to the grid, a global market that is expected to grow from US$452-million annually in 2014 to more than US-$16.5-billion by 2024. Eguana came to Mackie with two major goals: to fill a back order of batteries and to execute a European product rollout. Athanasopoulos and his team secured $3-million in financing to help the company do both.
The previous year, Mackie worked with Solegear Bioplastic Technologies Inc. (now Good Natured Products Inc.), a Vancouver company that manufactures a variety of plant-based food packaging. Food packaging accounts for just over half of the global “green” packaging market, which is tipped to be worth US$274-billion annually by 2020. Mackie secured $1.9-million to allow Solegear to fill orders and accelerate its commercialization efforts.
“I really like understanding a company’s needs and helping them grow,” Athanasopoulos says. “There’s always a capital constraint for growth, in Canada especially.” Working with a company to raise millions of dollars, then watching it execute its business plan, he says, is “really exciting.”
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