• by OMMA Magazine Writers , November 29, 2007

General Director, General Atlantic LLC

Anton Levy is a managing director at General Atlantic LLC, a global growth equity firm that has invested $1.5 billion in over 20 companies in the media and consumer sector since 1995. GA were early financial backers of now iconic online companies like Priceline and E*Trade. Levy has been with the Greenwich, Conn.-based firm for nearly 10 years, and heads up media and consumer practice. Recently profiled in Dealmaker magazine as one of the “40 under 40 Dealmakers for 2007,” he sits as director at several portfolio companies, including AKQA, Dice, MercadoLibre, Network Solutions and Webloyalty. 

What are companies like yours looking at when evaluating Internet brands?

>>As a global growth equity firm, our main focus is
identifying those firms that have continued attractive growth opportunities. Growth can be driven by consolidation within the industry, economies of scale, global expansion and opportunities driven by technology, among other things. We look for the strength of the management team, the quality of the product or service they offer, the traffic on the site and the extensibility of the brand, among other key considerations. I view a consumer brand, online or offline, as an asset that brings vast advantages to the right business. Most important of these assets, in my view, is the distribution potential that can be leveraged with the introduction of additional products and services to the current or potential customer base. 

Do you think the high valuations for Internet companies will be sustained?

>>Valuations are driven by the availability of capital and the expectation of continued growth. If there is a tightening of available capital, it will impact the players available to make either investments or strategic acquisitions. Similarly, if there is a perception of a slowdown within a certain sector or subsector, that will affect valuations. I believe that over the near-term, subject to a broader economic slowdown or recession, valuations will continue to be robust, but there will be periodic adjustments over time as subsectors mature and growth slows. 

In what areas do you anticipate the most consolidation in the coming 12 months?

>>Consolidation occurs when an industry is fragmented and there are benefits to be gained by combining players for market share or geographic reach. Companies also seek to acquire expertise that is difficult to develop internally in rapidly changing and highly competitive environments. All these factors exist in the broadly defined digital marketing or ad space and certainly within the online advertising and digital agency areas.  Moreover, an availability of capital either through the public markets or private equity markets helps fuel consolidation. I would expect continued activity in these areas next year and beyond.

Do you anticipate more partnership between agency holding companies and private equity firms?

>>Yes, we do, both from the perspective of holding companies looking to acquire private equity-funded firms, and also from the perspective of holding
companies and private equity firms leveraging their expertise and assets to make investments and/or acquisitions in partnership.

What advice would you give a company that is trying to groom itself for a private equity infusion?

>>I don’t think there is a magic bullet here, and there are lots of considerations. Excellent firms can obtain capital from many sources. The more difficult decision is finding the right partner who can provide the resources, expertise and commitment to help with the key strategic decisions that a growth company faces over time. An investor with an active long-term approach can provide significant benefit and help increase shareholder value. The best investors can provide access to a global network and help with a variety of issues including strategic planning, corporate governance, building a management team and board of directors, global expansion, technology initiatives, and more.