Tiny Investment Banks Gaining Ground In M&A Boom

A handshake in the shadows

After a long, slow period for deals, there’s been a boomlet in M&A. In the last few days we’ve seen Amazon buying Zappo’s, IBM acquiring SPSS and Sprint buying Virgin Mobile. It’s great news for the suffering investment banks, but it also looks like smaller, unknowns are getting a slice of the action.

Perhaps the damaged reputation of top Wall Street banks has creaked open the door for some small players.

Vincent Fernando points to this post on Deal Journal taking a look at the Sprint-Virgin deal:

With a few exceptions, Sprint Nextel’s acquisition of Virgin Mobile USA involved a cast of advisers that aren’t household names in the M&A world.

Sprint Nextel was advised by Wells Fargo Securities, which didn’t crack the top 30 on Dealogic’s rankings of investment banks by announced U.S. deal volume through July 21. Most of Wells Fargo Securities’s investment bankers come from Wachovia, which Wells acquired last year.

Two little known firms, Foros Advisors LLC and Colonnade Advisors LLC, provided a fairness opinion for Virgin Mobile.

Dealogic has no record of Foros advising on any deals over the past five years. (Deal Journal couldn’t even find a listed phone number for the firm). It turns out that Foros is a tiny operation that was recently started by Jean Manas, Deutsche Bank’s former head of mergers and acquisitions for the Americas.

Colonnade, which is based in Chicago, has advised on 17 small deals — mostly under $50 million — in the past decade, according to Dealogic. Colonnade was started by former J.P. Morgan banker Stuart Miller.

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