* M&A in TMT totals $64.8 bln year-to-date
* Strongest start since 2000
* Accounts for almost a third of all announced M&A
By Anjuli Davies
LONDON, Feb 8 The technology, media and telecoms
(TMT) sector has seen the busiest start to a year in terms of
M&A deals since the height of the dot.com boom in 2000, giving a
boost to boutique banks which are increasingly winning work as
The $64.8 billion of mergers and acquisitions (M&A) in the
TMT sector account for almost a third of all deals announced so
far this year, according to Thomson Reuters data.
This week alone, U.S. cable firm Liberty Global
unveiled a $23-billion bid, including debt, for Britain's Virgin
Media, while Dell's founder and CEO struck a
$24.4-billion deal to take the PC-maker private.
But the surge in TMT dealmaking has not been enough to lift
business for M&A bankers overall. The total value of deals
announced so far this year is $202.6 billion, down 3 percent on
the same time a year ago.
M&A activity has remained sluggish in the aftermath of the
global financial crisis. The value of M&A deals globally rose
just 2 percent in 2012 to $2.6 trillion, according to Thomson
Reuters/Freeman Consulting data.
And a reduction in the number of large deals translated into
a 13 percent drop in fees to $24.7 billion - bad news for
investment banks facing higher costs from tougher regulation.
A busy start to the year for new listings, however, could
raise bankers' hopes for 2013, with global volumes tripling
year-on-year to $10.6 billion, the Thomson Reuters data show.
THE RISE OF THE BOUTIQUE
In the TMT sector, a combination of large cash piles, low
interest rates, some players looking to divest assets to cut
debt and others seeking to bulk up to tackle tough regulations
and stiff competition, has fuelled dealmaking.
This week's two big deals have netted investment bank
advisers as much as $200 million in advisory fees and $600
million in debt underwriting fees, Freeman consulting estimates.
While Credit Suisse narrowly leads the ranking of
advisers in the TMT sector, having won mandates to advise both
Liberty Global and Silver Lake Partners in the latter's joint
bid for Dell, the surprise winner in the league tables has been
a boutique bank founded just last year.
For its role as lead financial adviser to Liberty Global in
its bid for Virgin Media, LionTree Advisors LLC has been
propelled into seventh place globally for all announced M&A
transactions year-to-date, the data shows.
Based in New York, LionTree was set up in July 2012 by
former head of investment banking for the Americas at UBS
, Aryeh Bourkoff, and former co-head of U.S. M&A at
UBS, Ehren Stenzler.
Liontree also acted as financial adviser to Warner Music in
its $764-million purchase of EMI's Parlophone Label Group.
Rival boutique Evercore Partners, meanwhile, advised the
Dell board of directors alongside J.P. Morgan, lifting
it to fifth position in the global rankings from 39th last year.
For several years, boutique banks have been gaining market
share from bigger rivals, claiming they have fewer conflicts of
interest when they advise clients because they are not trying to
sell other services, such as debt underwriting.
During 2012, boutique and independent investment firms
accounted for 21 percent of global M&A advisory fees, compared
with 10 percent in 2002, Thomson Reuters data shows.
GOLDMAN SACHS STILL ON TOP
Overall, Goldman Sachs is retaining its position at
the top of the league table, advising on 26 deals worth $64.5
billion year-to-date with a 32.9-percent market share.
J.P. Morgan ranks second, advising on 19 deals worth $52.7
billion with a 26.9-percent market share. Credit Suisse comes in
third, advising on 21 deals worth $46.9 billion and a
23.9-percent market share.
Goldman Sachs also tops the global league table for equity
capital markets activity, acting as bookrunner for 35 deals
worth $8.5 billion with 12.6-percent market share.
That included German real estate group LEG Immobilien's
$1.6-billion Frankfurt flotation, one of three
billion-plus initial public offerings (IPOs) so far this year.
A $1.1-billion listing by Japan's Nippon Prologis Reit
and U.S.-based Zoetis's $2.6-billion flotation
have also helped to boost IPO activity.
Morgan Stanley ranks second in the equity league
table with Citi coming in third.