A Seattle-based investment bank is looking for deals in Pittsburgh — for itself and for the new blank check company it sponsored and took public last week.
Cascadia Capital LLC Chairman and CEO Michael Butler said he’s been spending at least a week per month in Pittsburgh for the past three years getting the lay of the land and scouting for acquisition opportunities, particularly in the robotics, AI and automation space. Now he’s close to pulling the trigger.
“We’re making a big, long-term bet on Pittsburgh,” Butler said. “We saw Seattle transition from a promising tech hub to a major tech hub, and we think Pittsburgh is poised to go through the same transition. I’ve seen the movie in Seattle, and the same thing’s going to happen in Pittsburgh.”
Cascadia Capital specializes in mergers and acquisitions, debt capital and equity placement, conducting about 400 deals over its 21-year-history, according to the Puget Sound Business Journal, a sister publication. It typically does deals in the $50 million range, Butler said. In fall 2020, Cascadia Capital launched one of the nation’s first investment groups dedicated to robotics, automation and artificial intelligence, earmarking 20% of its resources to the effort.
Now Cascadia Capital, which is also interested in health care technology, is presently in discussions with a handful of Pittsburgh companies, Butler said. Separately, its special purpose acquisition company, Cascadia Acquisition Corp. (NASDAQ: CCAIU), is also in talks here. The SPAC closed a $150 million offering on Aug. 30 and wants to buy a company in the aforementioned space.
Neither Butler nor Jamie Boyd, Cascadia Capital managing director and CEO of the SPAC, would identify local targets. Boyd said the SPAC has 18 months to seal a deal.
In addition to both Butler and Boyd spending time in Pittsburgh, Cascadia Capital retained Mark DeSantis as a senior advisor to have boots on the ground. DeSantis, a repeat entrepreneur, is CEO of Bloomfield Robotics.
Butler believes Pittsburgh, Boston and Silicon Valley are the three centers for excellence in robotics, AI and automation, but that while the other two have established ecosystems replete with capital and investment banks, Pittsburgh is not at that stage. Yet.
“We want to be part of the developing markets,” he said.
Meanwhile Butler said he has personally invested in Allegheny City Stables, Go Realty's apartment development on the North Side. He and his wife have purchased six homes in various neighborhoods including the South Side and Millvale that they use as rental properties. His son interned at Industrial Scientific. But for all of that residential real estate, Butler stays at the Fairmont Pittsburgh when he’s in town.
“Right now, the Fairmont is our physical office,” Butler said. “If we could find the right investment banker here, we’d love to open an office here. There are not a lot of investment bankers here, which is good and bad. There’s opportunity.”
Prior to starting Cascadia Capital, Butler was a principal at Morgan Stanley and a managing director at Lehman Brothers.
