The trend of veteran dealmakers blowing out of big Wall Street firms to set up their own shops may have peaked in the post-crisis days of 2008 and 2009, but it continues today. One of the latest examples is San Francisco-based Dean Bradley Osborne LLC, or DBO, founded by five ex-Morgan Stanley bankers in February. The firm already has one deal under its belt, advising San Francisco construction firm URS Corp., alongside Morgan Stanley, on its $1.5 billion acquisition of Calgary, Alberta's Flint Energy Services Ltd., announced in February. More recently, DBO was hired by debt-laden snack foods company Diamond Foods Inc. to review its capital structure.
Both mandates are partly the result of relationships held by DBO co-founder and partner Gordon Dean, 50, who spent 25 years at Morgan Stanley. In 2007, Dean advised URS on its $3.2 billion acquisition of Washington Group International Inc. Then, during his last two years at Morgan, he "worked on trying to find the right energy play for URS," he says. Once URS targeted Flint, it tapped DBO to partner with lead adviser Morgan Stanley on the deal.
The Diamond Foods assignment, meanwhile, came via the company's new CEO, Rick Wolford, who replaced Michael Mendes following an accounting scandal and the demise of Diamond's plans to acquire Procter & Gamble Co.'s Pringles brand. Wolford was previously CEO of Del Monte Foods, where he tapped Dean for advice on several deals, including its $2.8 billion acquisition of H.J. Heinz Co.'s pet foods, soup and baby formula brands in 2002. DBO's assignment for Diamond could soon lead to more deal work, as The Wall Street Journal reported in late March that the company was approached by Blackstone Group LP, Kohlberg Kravis Roberts & Co. LP and TPG Capital about acquiring minority stakes.
Dean joined Morgan Stanley in 1986 after earning his M.B.A. from Yale University. He ultimately rose to vice chairman of investment banking, head of the firm's San Francisco investment bank, and co-head of its Western region. His four co-founders also had long Morgan Stanley careers. Mark Bradley, 48, first joined in 1985 and then left to earn his M.B.A. from Stanford. He returned to Morgan in 1989 and was ultimately named chairman of the financial sponsors group. Nicholas Osborne, 47, spent 25 years at the bank in high-yield finance, financial sponsor coverage and global tech M&A, which he eventually headed. Bryan Andrzejewski, 46, joined Morgan Stanley in 1988 and spent time in New York, Australia and Toronto before becoming the head of West Coast corporate finance execution in San Francisco. Robert Berner III, 55, worked at Morgan Stanley for 10 years beginning in 1986, but was most recently chairman of the U.S. advisory board at private equity firm CVC Capital Partners, which he joined in 2007 from Ripplewood Holdings LLC.
DBO's staff numbers 10, including the founders, analysts and vice president Anne Sissel, recently vice president of finance and business development at TPG-backed molecular diagnostics company Veracyte Inc. Dean says the firm, which plans to hire a handful of mid- and junior-level bankers in the next three months, was bombarded with 2,000 résumés following news of its launch, which he attributes partly to "overcapacity on Wall Street in the bulge-bracket firms."
Eventually, DBO plans to expand overseas -- "I'd be shocked if in two to three years we didn't have a presence in Hong Kong and London," Dean says -- but for now, it plans to capitalize on its unique position in San Francisco, where seasoned bulge-bracket bankers are relatively rare. Indeed, many boutiques hunting for San Francisco-based senior-level bankers "have tried to hire all of us at one time or another to run operations," Dean reports, but have had no success.