When it comes to M&A advisory shops these days, smaller isn't necessarily better. The general notion that small boutique M&A advisory firms would pick up the slack following the downfall or consolidation of the traditional Wall Street big boys like Lehman Brothers Holdings Inc., Bear Stearns Cos., Merrill Lynch & Co., Morgan Stanley (NYSE:MS) and Goldman Sachs Group Inc. (NYSE:GS) didn't play out as expected after those entities either merged, went bankrupt or reorganized into a financial holding companies. With no emerging dominance by boutique firm happening, the smaller shops may start seeing mergers amongst themselves in order to survive.
Boutique firms' share of U.S. M&A deal valuation has fallen 54% so far this year to $113 billion worth of deals compared to last year. The drop-off is especially pronounced at Greenhill & Co. (NYSE:GHL), which has gotten off to a slow start in the first half of 2009. The firm has only advised on $394 million worth of deals through late June, making it unlikely it will match the $17.8 billion for all of 2008, according to the New York Post.
With M&A advisory fees cooling for boutiques, M&A within the smaller firms may become a growing option. Revolution Partners LLC, a boutique M&A technology advisory firm, was bought out in December 2008 by Morgan Keegan & Co. Meanwhile, Pacific Growth Securities Equities LLC was sold to Wedbush Morgan Securities Inc. in December 2008. - Gerald Magpily
See New York Post article
