Evercore Partners Inc., the investment bank led by Roger Altman, is climbing the ranks of Wall Street’s top advisers on mergers and acquisitions after winning roles in some of the year’s biggest deals.
The company’s stock jumped 12 percent yesterday as investors anticipated a boost in fee revenue from the firm’s work on AT&T Inc.’s $39 billion takeover of T-Mobile USA, this year’s biggest acquisition.
The deal builds on a winning streak for Evercore. The firm advised Sanofi-Aventis SA on its $20.1 billion purchase of Genzyme Corp. announced in February and worked with Lubrizol Corp. on its $9.2 billion sale to Warren Buffett’s Berkshire Hathaway Inc. Altman, a former deputy secretary of the U.S. Treasury, has expanded Evercore into a more than 600-employee firm since founding the New York-based company in 1996.
“We are not a small boutique anymore,” Altman, 64, said in an interview. “We now have advised on three of the five largest global merger agreements of 2011.”
Those deals have helped Evercore jump into the No. 9 slot for M&A advisers so far this year, capturing 10 percent of the market, according to data compiled by Bloomberg. Last year, the bank was 16th with a 3 percent market share, the data show.
In the T-Mobile deal, Evercore joined Greenhill & Co., another independent investment bank, and JPMorgan Chase & Co., the top ranked M&A adviser this year, in advising Dallas-based AT&T.
Deals This Week
Evercore’s relationship with AT&T started in 2006 when it advised the company on its acquisition of BellSouth Corp. for $102 billion including debt. Since then, the firm has maintained a “good relationship” with the company, Altman said.
The bank also advised Chicago-based OptionsXpress Holdings Inc. on its $1 billion sale to Charles Schwab Corp. announced yesterday and was the exclusive financial adviser to Internet-photo company Shutterfly Inc. on its $333 million agreement to buy Tiny Prints Inc. Additionally, the firm provided financial advice to Severstal OAO on its $1.2 billion sale of three U.S. plants to Renco Group Inc. announced this month.
“We are encouraged by the uptick in activity,” said Warren Gardiner, an analyst at Ticonderoga Securities, in a note to clients yesterday, raising his recommendation for Evercore’s shares to “buy” from “neutral.” “We also view the recent improvement in the backlog as somewhat of a safety net if deal activity begins to stall.”
Evercore slipped 9 cents, or 0.3 percent, to $33.97 as of 10 a.m. in New York Stock Exchange composite trading after gaining the most yesterday in two years. After the advance, the stock is down 0.1 percent this year, giving the bank a market value of $1.27 billion.
A majority of the firm’s revenue comes from investment banking, which totaled $301.9 million in 2010, compared with $293.3 million in 2009, according to a filing with securities regulators. Evercore also has an investment management business, which brought in revenue of $77.6 million last year, compared with $23.3 million a year earlier.
Any increase in fees would benefit members of the firm, who collectively own 47 percent of the company, according to a December presentation on Evercore’s website.
The firm has more than doubled its headcount since 2007, when it employed 289, and had 610 workers at the end of 2010, according to its latest regulatory filing. Evercore has 59 partners, typically adds five to seven annually and is likely to do so again this year, Altman said.
“They’ve hired pretty aggressively the past few years,” said Devin Ryan, an analyst at Sandler O’Neill & Partners in New York. “They’ve increased their headcount of senior advisers, and the people they’ve brought in have been generally heads of businesses or heads of sectors at the largest investment banks.”
Evercore announced yesterday that it hired Eric Mandl, a UBS AG banker who has advised clients including Dell Inc. on takeovers, to cover technology and Internet companies.
Last year, the firm hired Perk Hixon, formerly of Lazard Ltd., to lead its new mining, metals and materials advisory group. It also added Philip Kassin, a former executive at billionaire Len Blavatnik’s Access Industries Holdings LLC, to focus on advising companies in the chemicals and energy industries.
Altman has also expanded internationally. To tap emerging markets, Evercore set up an advisory and investment venture in 2009 with Beijing-based brokerage Citic Securities Co. Last September, Evercore agreed to pay $20 million for a 50 percent interest in G5 Advisors, a Sao Paulo-based investment banking boutique founded by former Goldman Sachs Group Inc. partner Corrado Varoli.
Altman began his banking career at Lehman Brothers Holdings Inc. and served in the Carter administration as assistant secretary of the Treasury. In the 1980s, he joined Blackstone Group LP. He was deputy Treasury secretary in the Clinton administration from 1993 to 1995.
In addition to advising takeovers, Evercore works on corporate restructurings. In 2009, it helped lead General Motors Corp. through bankruptcy, and in 2010, helped with the Detroit-based carmaker’s $23.1 billion initial public offering, which was the year’s largest.
“They have always banked large, multinational companies in the past,” said Ryan at Sandler O’Neill. “In growing, they’ve kept that high profile.”