October 29, 2021
We’re excited to announce that our own Bobbi Babitz (now Armstrong) was mentioned in Axial’s latest M&A article, “Faces of the Lower Middle Market: Investment Bankers.” After a busy year in M&A, Axial decided to interview some top-performing investment banking teams to see what they had to say. An excerpt from her interview is below:
What made you take the leap to start your own firm—in Denver?
Bobbi Babitz: I am a 25-year veteran in investment banking and private equity and also occasionally operating portfolio companies that I’ve invested in. So, it was sort of the full circle of transactions. I am a hard-wired deal person, and after college I moved to New York and became really intrigued with Wall Street. Thus, a career was born. I’ve been in the deal world since inception, really.
By the time 2010 came along, I had spent my entire career in New York City. My family has had a home in Colorado for my whole life, and I was a competitive skier growing up—I’m also currently on the board of the largest nonprofit benefiting the US Ski Team—so skiing and the mountains are my passion. My brother and his family are in Colorado, and Denver has always been, I say, the home of my heart. It’s my home on a spiritual basis versus New York, which is more on a business basis.
And did Britehorn predate your move to Denver?
BB: It happened concurrently. I moved out in 2010. I figured it was a good time to leave New York because it was right after the financial correction, and the deal market was still pretty slow. My thought was, there’s nothing going on in New York so I might as well be skiing.
My intention was to get out to Colorado and ski 35 days during the season. But I quickly met my soon-to-be partners and never fulfilled that goal. I bumped into Brett and then Andrew, and we got together and formed the predecessor to Britehorn, which we formalized in 2013.
We’re a full-service middle-market firm, and almost 100 percent of our business today is M&A. We also bought a broker dealer in 2015 when we got to a size where it made sense to in-house that regulatory function. As we grew, we realized a lot of boutique practices do not have good broker dealer solutions. Consequently, we became a platform for investment banks like ourselves, and, as of today, we have about 40 groups on our Britehorn Securities platforms as well.
Why do you think that gap still exists?
BB: There have been two big waves of activity away from Wall Street and other financial centers. People were primarily operating in the securities industry under the heading of larger organizations when the market retracted in 2008–09. Then, with the advent of all sorts of new tools and widespread broadband access, people realized that they could do these things on their own without going out and joining another investment bank. That began the contraction of Wall Street. That’s when you saw the first wave of people going out and trying to do this on their own, recognizing that they needed regulatory sponsorship.
We’re seeing another wave of that since COVID, but really it was already happening. It’s certainly changed the way that we all do business and has allowed others to build apps in their garage or launch two-person banking teams running half a billion in transactions out of their home office. The convergence of the recession and the advent of technology created a whole new approach to the market. Now anyone can manage their own practice, place deals, and place funds, etc., without giving up their economics.
What does the ideal Britehorn client look like?
BB: Historically, we’ve been in the business services, technology, and consumer verticals, but we’re also very, very comfortable with tech and have been active in title insurance for a long time. We are probably the most prolific title insurance investment bank in the country, if not in the world. I know it’s a weird claim to fame, but we’ve developed that market for a long time and have been very active in the space. We have about 10 transactions underway at this point, and with a small team, so title insurance is definitely a real subspecialty for us.
The ideal client has a perspective that they’re prepared to exit and is open-minded in terms of opportunities. We really pride ourselves in bringing to a seller different scenarios, ranging from a 100 percent to more hybrid options like a change of control, in which they retain a material stake in the business and they continue on for some time. Or it could be a partial sale to de-risk.
We are very focused on our clients and ensuring that we give them optionality that really matches what they want to do. It takes really excellent communication, a lot of psychology skills and a pretty deep, trusting relationship to understand where the clients are and also to help them identify opportunities that meet them. As a group, we pride ourselves on being partner focused in client engagement, meaning our back office people are not communicating with clients. We, the partners, are working directly with them and are their point of contact. That builds those relationships.
That’s not too typical at the bigger shops, correct?
BB: Not at all. I spent a lot of my life on the buy side, and I came out of private equity before I founded Britehorn. Honestly, as a junior investment banker many years ago, I was very aware that a lot of junior people weren’t experienced on the front lines of dealmaking, and yet they were out there making some pretty important decisions. That’s frightening because a transaction is a fluid process of many, very nuanced moving parts between sophisticated entities. Any sort of minor tweaks or mistakes can easily make or break the entire deal. When I think back on the mistakes I made as a junior and inexperienced person, I cringe.
So, we really pride ourselves on the fact that every transaction we work on is being staffed by at least three partner-level, highly experienced people with decades of experience guiding clients through these transactions. Consequently—and I don’t want to jinx myself—our close rate is 100 percent over the course of our organization, which is rare.