In the second quarter of 2017, there were almost 30 new sell-side advisors that closed a deal for the first time; eleven percent of those firms were Texas based. There were nearly 200 unique professionals that advised on a deal for the first time in this period; however, this does not necessarily indicate that the investment bank that they represent is new to the M&A ecosystem.
Overall, intermediated deals for the second quarter were dominated by the IT sector, followed by Services and Healthcare. The majority of advisors were active in the Mid-Atlantic region, followed by the Pacific West and Great Lakes. Of all intermediated deals that traded to a sponsor in the second quarter, 40% had a Limited closing process, 33% had a Broad closing process, and 27% had a Moderate closing process, per the SPS Sell-Side Process Indicator.
For sponsors to better understand the community of available advisors, this next part will profile two intermediaries from the second quarter:
- LEHNS Capital Advisory
- Charlotte, NC
- New sell-side advisor to the SPS database
- D.A. Davidson
- Great Falls, MT
- Active in the past several years
In May of 2017, LEHNS Capital advised, alongside Alt Ridge Capital, LLC, on the buyout of Microf LLC from Rotunda Capital Partners to Atalaya Capital. Per the SPS Sell-Side Process Indicator, the deal had a limited closing process, and fell into the Consumer: Services and Financial: Lending sectors.
In the second quarter, D.A. Davidson advised on two transactions: American Eagle Instruments, Inc. and Birchwood Lighting. Per the Sell-Side Process Index, D.A. Davidson runs a more moderate closing process. Moreover, the firm is active across the board in various industries, including, but not limited to, Financial, Energy, Consumer, IT, Food, and Transportation.
Using these profiles, sponsors can analyze any advisor with real transaction data, to productively and intelligently develop and/or adjust a sourcing strategy. The Sell-Side Process Indicator illustrates the type of closing process that an advisor utilizes, whether it be Limited, Moderate, or Broad.
As a sponsor, if you are looking for a more limited or quiet process, using this indicator can help to fine-tune your approach, as well as keep costs to a minimum. If you are sector focused, knowing which firms and professionals are advising on deals in your space will be more critical.