In the perpetual battle for tech investment banking supremacy, Goldman Sachs has taken a commanding lead this year over its Wall Street rivals, thanks to its top role in the three biggest deals of 2019.
The guy at the center of the action, Sam Britton, is a mountain biking New England transplant who you've probably never heard of. He is so publicity averse that he preferred not to have his individual photo at the top of this story (sorry, Sam). He's a far cry from the swashbuckling Wall Street legends like Bruce Wasserstein, Jimmy Lee and Felix Rohatyn, who once controlled banking and were perfectly comfortable posing for magazine covers.
Britton, 50, is the head of Goldman's technology, media and telecom M&A group, which is always a powerhouse in Silicon Valley but rarely has enjoyed this level of dominance.
Normally neck and neck with Morgan Stanley and J.P. Morgan Chase, Goldman has opened up a 12 percentage point market share advantage globally — 39% to 27% — over both banks when it comes to advising tech mergers and acquisitions, according to Dealogic. Last year, Goldman was third. In 2017, it finished first, beating out JPMorgan by less than four percentage points, based on Dealogic's data.
Asked to explain the recent string of successes, Britton insisted on sharing credit with a team that's been together for two decades and has advised on every kind of big deal imaginable, whether it's an IPO, strategic acquisition, private equity buyout or massive asset sale.
"When Goldman is hired to sell a company, we're not delivering a banker — we're delivering a composite of experts," Britton told CNBC in a recent interview. "These are people I've been in the trenches with for 20 years."
From IPO to M&A
Britton's biggest win of the year came in June, when Salesforce agreed to buy Tableau Software for $15.7 billion, which was by far the largest acquisition ever for the cloud software company in addition to being the most expensive tech transaction of 2019. The second-biggest deal was the sale of Ultimate Software for $11 billion to a consortium of private equity firms, and the third-largest was this month's $10.7 billion sale of Symantec's enterprise business to Broadcom.
That's helped Goldman Sachs capture more than 48% of U.S. market share for tech deals this year, topping Morgan Stanley's 38%, according to Dealogic. The gap is a bit narrower in the U.S. than it is globally.
The Tableau mandate speaks to how Goldman starts seeking out tech companies well before they become big businesses. Goldman won the lead left spot on Tableau's IPO in 2013, which Britton attributes to a longstanding relationship between the company's founders and Goldman's George Lee, who joined the bank in 1994 and is co-chairman of the global tech group.
Being called on to work on a $15-billion-plus acquisition is the ultimate reward. The 1% or so a bank makes from that sort of deal produces many times the amount of revenue that it gets from the few percentage points worth of fees on a $300 million IPO — about what Tableau raised.
"You have to have durability with relationships, like with George Lee taking Tableau public," said Britton, who grew up in Connecticut, studied at Yale University and got his MBA from Columbia Business School in New York. "We would never have been involved in the sale without that."
In the M&A world, the selling bankers who are out to get the highest price tend to be known as the most ruthless negotiators. Qatalyst Group, the boutique technology bank founded by Frank Quattrone, has earned such a reputation after years of getting sky-high premiums for clients.
Not just about the transaction
Britton's approach is different, according to those who have done deals with and against him.
"A lot of M&A guys are process oriented," said John Hodge, who was a technology M&A banker at Morgan Stanley and Credit Suisse for nearly 20 years before moving to private equity. "They say 'here's what you need to do,' and execute. There are others who have specific industry expertise from years of experience."
Hodge, who's now a partner at buyout firm Rubicon Technology Partners, puts Britton in a third category of bankers who "are very rare" and "actually true advisors to boards of directors."
"He's got everything you need and then combines a layer of critical thinking on top of his skills," Hodge said.
Britton says he picked up his analytical style from his father, a mathematician who would jokingly chide his banking skills as nothing more than "division and multiplication." He's used his strength with numbers to advise eBay for decades on a series of acquisitions and divestitures, including the sale of Skype, the spinoff of PayPal and, according to people familiar with the matter, the company's current plan to spinoff or sell StubHub and its Classifieds business. Britton declined to comment on that process.
He's quick to deflect his success to a team of technology bankers who have been together since the 1990s and now manage various practices. They include Lee as well as Ryan Limaye and Nick Giovanni, who are co-heads of global tech banking, and Tammy Kiely, who was promoted last year to co-lead tech, media and telecommunications deals.
Giovanni said in an interview that the team consists of "sector experts who develop deep client relationships that last much longer than any single transaction."
And unlike at other financial firms, where advisors get commissions for specific transactions, Goldman pays out the whole team for its collective results, Britton said.
About five years ago, Britton said he saw the changing tech landscape and made a conscious decision to focus more on subscription software, bulking up Goldman's software banking team and learning as much as he could about what acquirers like Salesforce, Oracle, Cisco, HPE and IBM would be pursuing. The three top deals of 2019 have all been in software, while semiconductor, data center and internet acquisitions have been sparse.
Symantec, a 37-year-old software company that's made all sorts of acquisitions and divestitures over the years, had never turned to Goldman to lead a deal prior to its recent sale process. A series of related transactions led by Britton put his group in position to get the call.
It started in 2011, when cybersecurity company Blue Coat Technologies hired Britton for a $1.3 billion sale to buyout firm Thoma Bravo. Britton was then tapped by Thoma Bravo to sell Blue Coat to Bain Capital in 2015 for $2.4 billion. A year later, Bain sold Blue Coat to Symantec for $4.65 billion, again hiring Britton on the deal.
The most lucrative in the sequence of deals came this month, when Britton flipped sides to advise Symantec on the sale of its enterprise business to Broadcom.
To keep getting hired by different buyers of the same asset, Britton did two things at once that may explain his broader success. He stayed close with management and the board, but he also impressed them by making them pay up.
"Ultimately you are hired to get the best outcome for your client," said Britton. "If the other side sees that firsthand, and if you focus on operating with integrity, you can build repeat business."
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