CEO of Samtech after sale of the firm to Canadian giant Vela: “We are going to take on the world”

In early April, the acquisition of Samtech, a Chilean company dedicated to fleet management, machine performance, and software for the mining, construction, and cement industries, was finalized for approximately US$13 million.

The buyer? Vela, a firm part of Constellation Software, a technology giant listed on the Toronto Stock Exchange. Here, former partner Cristián Barrientos, who will remain as general manager, reviews the company's history and outlines the next steps.

In 2009 the industrial civil engineer Cristián Barrientos went to work at Samtech, at that time an incipient fleet control company that was part of the Santa Marta mining holding company. He left as a commercial manager, but since that moment a lot has happened: the company went through crises, triumphs, resignations and new projects.

Barrientos was a privileged witness of that process: He went from being an executive to becoming senior partner and general manager. And just in that role, five weeks ago, completed the sale of this firm to Vela, an entity that is part of Constellation Software, a technology giant listed on the Toronto Stock Exchange.

The amount of the transaction was close to US$ 13 million, comment experts. The deal was without fuss, but it does mark a milestone in the mining technology and construction industry, because, people in the sector say, it once again reactivates an area that is of interest to large foreign groups.

Today, Samtech's core business is fleet management, machine performance and telematics software and hardware for the mining, construction, cement and equipment rental industries, both in Chile and Colombia.

They have 130 employees, 600 clients, including BHP, Antofagasta Minerals, SQM, Codelco, Besalco, Melón and FedEx, and manage nearly 30 thousand connected assets.
Today, all these processes are already part of Vela, a company that these days is already planning the international leap of the Chilean company.

Crisis and exit

His first role in the firm, Barrientos recalls sitting in his office -located in a building in Ciudad Empresarial-, was to expand the service offering and increase the client portfolio. And he achieved it. So much so, that two years later they offered him to buy a small stake in the company and become a minority partner.

Everything was going well, he says, until 2013 when he received a job offer. “I had planned to work in a large company, a multinational. I was missing that part. And I received an invitation to join Finning (Caterpillar distributor). I accepted. I initially started as general manager of a subsidiary technology company, and shortly thereafter I took the leadership of technological solutions for construction, energy and mining. It was a very very corporate life, very entertaining.”

Nevertheless, Barrientos always maintained a link with Samtech because, upon leaving, he never sold his shares. For this reason, in 2016, the majority partners of Samtech asked him for advice: the numbers were wrong and there were serious financial problems. 

"I was having payment cycle problems, financing difficulties, cash difficulties. They were quite complicated, but it was still an interesting company, with billing, clients and technology development. “Then I saw him as a diamond in the rough,” recalls the executive.

“During this consultation the possibility of returning was opened. And it was very difficult because the corporate world caught my attention, but I also really liked this alternative of creating something, scaling a company and taking it to a new level.”

That was how In July 2017 he returned to Samtech, but this time as general manager. To finalize his arrival, he did set a condition: increase his shareholding in the company. The directors agreed and after four years away, he officially returned to the company. His first decision was to create a five-year plan:

“I said that Samtech had to be organized, directed, but that we should not lose the bases of innovation. But we still needed an innovation that was really effective in results.”

For that he defined four bases: human development, innovation, operational excellence, and added value and profitability. They focused on this last goal for the first 24 months. When they achieved a level of stabilization, Barrientos recalls, they focused on creating new technologies that “made a difference.”

They created new solutions (such as Terraplaner, which manages earthworks), acquired the company TeleMétrica, which was owned by the company One Telecom, and opened operations in Colombia.

In less than six months they had solved the problems and returned to breakeven.

To negotiate

At the beginning of last year Barrientos received a message on LinkedIn that expressed interest from an international company in buying Samtech. She read it a month later. And even though she had no intention of selling, she still met with interested parties to learn the details of the project. 

There he learned that his counterpart was a firm that was part of the Constellation Software group, one of the fastest growing companies in Canada: in the last five years its stock has grown more than 220%.They quickly signed a confidentiality agreement and with that ready he approached the other Samtech partners to explain the offer. Everyone's response was the same: “Let's see, let's keep moving forward.”

As the negotiations progressed, Samtech partners became convinced of the operation. “I felt that a point had been reached where a new stage was required,” Barrientos acknowledges.

The first time Vela executives visited Santiago, Barrientos warned them that while they were interested in the transaction, they would not sell the company if their counterpart sought to transform the company overnight. They answered what they were waiting for: they wanted to strengthen the firm while maintaining the people, products and brands. That was enough to convince them.

In the legal field, the parties were advised by a series of law firms: Arnold & Porter (from New York), Carey and Philippi Prietocarrizosa Ferrero DU & Uría, by Vela; and Dalgalarrando & Cia, by Samtech. In the financial area of ​​due diligence there was EY. “The meetings were generally 8 to 1,” describes Barrientos, who states that the company was sold “with zero debt.”

“It was a very powerful, very powerful process, where finally two months ago I was in Vancouver, Canada, where we finished reviewing the last points of the due diligence process to finally end up signing the business closure five weeks ago in Santiago” .

- Was it celebrated when the sale was completed?
- We were in Dalgalarrando's office and I said: “My logic tells me that I should be jumping on one leg and I am not jumping on one leg. I'm happy, I'm grateful. But more than that, I don't know. "I feel part of a new process, because they were also quite clear, especially the last part of the process, that they wanted me to stay (in the company)."

Indeed, the new owners invited Barrientos to stay in charge of the company. Not only him: Vela did not make any profound changes in the executive structure. Since the transaction was completed, different people from the group have traveled to Santiago to review the business and meet the collaborators.

Barrientos warns that, although it may sound cliché, his goal now is to “take on the world”: “We have built solutions that are not fashion, they are solutions that target specific problems. And the problems that a company that moves earth or rocks in Antofagasta, Perth or South Africa have are the same. The operators change, the languages ​​change, the brands and equipment change, but the critical variables to generate efficiency and control of the business are the same. So today we could be deployed with Vale in Brazil or in the oil sands in Canada.”

See original news: Diario DF MAS