Cascadia Capital Deepens Its Commitment to Software and Services
Seattle-Based Investment Bank Brings Michael Orbach and His 25-Plus-Years of Operational and Transactional Experience in the Technology Space Onboard
Seattle, WA (PRWEB) May 14, 2009 -- Cascadia Capital, LLC, a national investment bank that finances the future for technology companies, today announced that Michael Orbach, a veteran player in the software and services market, has joined the firm as a Managing Director.
With over 25 years of operational and transactional experience, Orbach has closed more than 50 public, private and cross-border mergers and acquisitions and financings in enterprise software, Internet, digital media, broadcast, storage, IT security, business services, IT systems and diversified industries.
Orbach comes to Cascadia from Pagemill Partners, where he served as a Managing Director. Prior to Pagemill, he was a founding member of ABB New Ventures Ltd, the corporate finance and venture capital group of ABB Ltd, where he was Managing Director of the ABB Industrial IT Venture Fund.
During his career as a software entrepreneur, Orbach co-founded and managed Simulation Sciences from inception through its IPO; he then sold the business to Invensys plc (LSE: ISYS). Orbach also led technology and service company M&A for Aspen Technology (NASDAQ:AZPN). And he co-founded Skyva International, which he later sold to ABB Ltd. (VIRTX: ABBN) for $130M in cash.
Orbach has a bachelor's degree in chemical engineering from the University of Witwatersrand in South Africa and an MBA from the University of Washington.
Taking Advantage of the Upside; Guarding Against the Downside
"Michael has a crucial blend of operational and transactional expertise, and that's essential in today's economy," says Michael Butler, Cascadia's Chairman and CEO. "We see tremendous opportunity in software and services right now, and with a banker like Michael on our team, we know we'll be able to help companies take advantage of the upside and guard against the downside."
Key Trends in Software and Services to Watch
For his part, Orbach sees 10 critical trends in software and services today:
| | - Continued consolidation by public company "aggregators" of technology companies that are considered to be "disruptive innovators" and/or that have achieved a measurable level of customer traction
- National and global M&A perspectives that drive activity independent of geographies and vertical industries
- Declining value of targets due to deflationary expectations, decreased financial performance and difficulty in projecting cash flows
- Best "buyers market" in decades, even though Bid-Ask spreads are still wide, due to unrealistic seller expectations, a market that is beginning to lower prices to more realistic values, and buyers who are still uncertain regarding the value of targets
- Buyers disproportionately weighted toward tactical issues like streamlining costs, acquiring tuck-in technologies, distribution and customers, versus broader strategic drivers characteristic of transformative deals
- Rise in the number of transactions that use non-cash considerations that conserve cash and that make greater use of common and convertible preferred stock
- Increasing use of contingency payments based on future performance
- Growing use of debt to acquire distressed businesses
- Jump in the number of private-to-private mergers and acquisitions, which favor non-cash considerations and earn-out structures
- More rigorous deal evaluation and execution, resulting in longer deal cycles due to increased modeling and valuation work, more exacting due diligence, a less optimistic view of synergies, and a greater focus on integration
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2009 - Where the M&A Activity Will Be
"Corporate and private equity led transactions were down by 52 percent and 66 percent, respectively, in March 2009 versus March 2008," explains Orbach. "But there was much better news in April 2009, which was the richest single month in terms of aggregate deal value since June 2008. I believe M&A is likely to continue this year, as Bid-Ask spreads narrow, VC's and Growth Equity firms triage their portfolios and the strategic consolidators continue to acquire innovative companies in sectors such as: desktop, storage and server virtualization; Software-as-a-Service (SaaS); automated provisioning and configuration of IT infrastructures; data center automation; cloud computing; legal technology and governance, risk and compliance (GRC)."
For more information about Cascadia Capital, please visit www.cascadiacapital.com.
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