Pauline E. Ranger Learn from M&A transactions in emerging markets.
Grit & Growth presents Victor Basta, CEO at DAI Magister, in a masterclass about the ins and outs of mergers and purchases in Africa. Victor Basta, a 30-year veteran of M&A transactions in Europe, the Middle East, and Africa, provides tactical, practical advice on attracting buyers, navigating due diligence, and negotiating deals.
Bastaopens in new window facilitated deals and exits for the founders of tech-enabled, fast-growing companies throughout Africa. He considers it an honor to be part of such life-changing experiences for entrepreneurs, businesses, and Africa as a continent.
He said, “Everything we do is more than just an inflection; it’s more than a pivot for a business.” It can be a matter of life and death for a company.
Basta says investing in frontier markets such as Africa can be risky and rewarding. This is why he advises entrepreneurs to start preparing from the very beginning for a life-changing transaction. Basta believes that you can’t control events, nor do you get to pick the moment.
What does success look and feel like? Basta says that success is when you only have to make small compromises at the end of a deal because you prepared and listened to what the buyer values most during the due diligence. When you have the least leverage, you will be successful because you’ll know that and live to fight another. My goal is to plan for compromises that appear larger than they are.
Masterclass: Top Takeaways
You want to be bought, not sold.
Build strategic relationships with potential buyers many years before they are likely to buy.
You can get on the radar by proactively broadcasting and demonstrating expertise and viability.
Support the Growth of your team so that you can demonstrate to buyers that you have people who are prepared to take on leadership roles.
Even if your heart isn’t in it, you should always act as if the buyer will be open to a discussion.
Ensure your senior team has practiced the message before you begin due diligence.
Be prepared to compromise at the transaction’s final stages- the smaller, the better.
Basta shares his insights, strategies, and advice to help you prepare for a successful merger or acquisition.
Full Transcript
Darius Teter Previously, on Grit & Growth, we examined the stories of African strategic acquisitions by Nigerian Fintech, Ethiopian Fintech, and a Kenyan outsourcing IT company. Victor Basta, CEO at DAI Magister, gave us powerful insights in both episodes.
Victor Basta: You cannot find a multiplier greater anywhere else in the world.
Darius Teter: Victor has a wealth of knowledge in mergers and purchases on the continent. Today we will dive deeper one-on-one to learn more about his experiences. We talk about the benefits of working in frontiers markets, how to attract buyers, the best way to convince your team to work with you, and the importance of maintaining value during the due diligence phase.
I’m Darius Teter. This is a Grit & Growth masterclass with the Stanford Graduate School of Business. It’s the show where African and South Asia intrepid entrepreneurs discuss their challenges and successes. Let’s leave it to Victor to introduce himself.
Victor Basta: So I’m Victor Basta. I am the CEO of DAI Magister. We’re the most active advisors in Africa and the Middle East. The growth companies are mainly focused on technology-enabled businesses.
Darius Teter, I was reading an interview you did a while back, and you had this excellent quote where you said that you didn’t think of yourself as someone who makes deals, but rather, you see yourself as someone who helps others through sales. You consider it an honor to be a part of someone’s life-changing experience. Could you elaborate on that?
Victor Basta: Sure. We do almost everything at a time when a lot is on the table for both a company and a team. After a while, we become accustomed to it. After almost 30 years of doing this, everything we do is more than a pivot point. It’s more than just a pivotal point for an organization. I need to track how many life-changing events I was privileged to witness. You’re also in the middle of creating it, which is an absolute privilege.
After all these years, I still get up at 7:00 am on Saturdays for conference calls. It’s also why we are so excited to focus our efforts on emerging markets. They are harder to work with, but the rewards are even more significant.
Darius Teter: Can you tell us a bit more? What is happening in the African Emerging Market ecosystem in the mergers & acquisitions space that you find exciting, interesting, or new?
Victor Basta First time in history, you have a group of companies starting to transform the lives of the continent in a manner that grants money could never do. The only way to speed up the industrialization process on a continent with far less infrastructure than it needs and will take decades to fix is by leveraging technology.
It would help if you had dams, rivers, and highways. Again, more is needed to transform the economic life of the continent. We must accelerate Africa’s industrialization to change the economic landscape and give us all a shot at a better future. The other aspect is that for Africa to achieve industrialization success today, it is different from China. Burning coal burns the earth. We cannot afford that.
Darius Teter’s Industrialization of Africa could mean something entirely different. It might be the remote distribution of digital services, an expansion of network penetration, and lower bandwidth costs. Right? What does it look like to do these kinds of deals to bring this kind of growth capital to these markets?
