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Goldman, Sachs & co. [GS] has long maintained a healthy lead over its rivals in advising on technology M&A, but last year the race tightened.
The 451 Group has issued its tech league table report for 2007, and while it shows Goldman remains top of the heap after advising on deals worth a total of $79 billion, the No. 2 adviser, Credit Suisse Group, has closed the gap, at $75 billion. Even more impressive, Morgan Stanley [MS] last year doubled its technology mandate dealflow from the previous year, reporting $74 billion in deals.
As 451 Group analyst Brenon Daly notes, the names of the banks in first, second and third place could have easily been swapped had a mandate swung from one adviser to another. It has happened before, in rather dramatic fashion.
Back in 2002, when tech dealflow had slowed dramatically following the bursting of the Internet bubble, the collapse of the $545 million merger of chip equipment makers Veeco Instruments Inc. [VECO] and FEI Co. [FEIC] in January 2003 forced a rejiggering that moved Credit Suisse from second place to third. Salomon Smith Barney, which advised Veeco, gave up sixth place to Merrill Lynch & Co. [MER].
We doubt 2007's top three are holding their breath, but it wouldn't take a huge deal by today's standards to change their places on the winner's podium. For that matter, at least one of Goldman's mandates from last year is at risk: Bain Capital LLC and Huawei Technologies Co. Ltd.'s $2.2 billion buyout of networking gear maker 3Com Corp. [COMS]. The death of that deal, which is floundering due to national security concerns, wouldn't unseat Goldman, but it would represent a blow to UBS Investment Bank [UBS] by erasing nearly 20% of its mandate dollars. The value of UBS' tech deals plummeted from $30 billion in 2006 to $13 billion last year. Some other interesting stats from the report:
- Like UBS, J.P. Morgan Chase & Co. [JPM] crashed last year, falling from second place in 2006's tech M&A league tables to 11th.
- Showing the ascendancy of the so-called "bulge boutique" advisory shops, Evercore Partners [EVR] landed in the top 10 for the first time, quadrupling its 2006 numbers with $47 billion in 2007.
See report from 451 Group
See Feb. 20 story from Tech Confidential
See March 2007 story from TheDeal.com
See January 2003 story from TheDeal.com
