AXCS Capital yesterday announced its acquisition of George Smith Partners. It’s the type of marriage that has become common: a very young tech-oriented company uses funding from backers to purchase an older company that fills out an important capability while also providing an injection of gravitas.
“The acquisition propels AXCS Capital’s vision of digitizing the capital markets arena,” the press release said. AXCS describes itself as “a technology company redefining how capital advisory services are delivered in commercial real estate financing transactions.”
If AXCS doesn’t sound familiar, don’t feel like you’ve been on an island somewhere. The company’s incorporation date in Delaware was Feb. 10, 2022, according to data from the Secretary of State’s office. The company then listed as an out-of-state corporation in Washington State on February 23, 2022, and in California on March 2, 2022.
The company’s website is sparse, with a mission statement, a link to the press release, a quote about the acquisition from AXCS CEO John Day, and contact information for the California and Washington offices. No more detailed information on what the company does specifically nor how it does it.
George Smith, on the other hand, has been in business for 35 years, according to the company, and is well known for capital provision, structured financing services, fee-based advisory services, and expert witness litigation support. The firm has worked in such areas as hotel and resort, industrial, office, senior housing, medical office, land development, SFR, multifamily, and retail. “The company arranged more than $3.5 billion in structured capital transactions in 2021 and $65 billion in financing since its inception,” according to the deal press release.
The deal closed on June 10 for an undisclosed figure, prodding the question of the degree of backing AXCS has to pull off such a deal.
From first blush, it appears that George Smith, while listing itself as “an AXCS Capital company,” will continue to ply its trade. That might be because AXCS hasn’t yet finished any of the technology that it mentions, or at least that it hasn’t announced anything.
It isn’t uncommon for well-backed tech companies to acquire others that either pose a competitive threat or, more likely here, provide either technology or expertise and content of some sort that the acquiring firm needs.
Pulling together disparate expertise always requires time, and when the knowledge is in the form of human experience and savvy, the development period can take even longer.