Montgomery & Co., the Santa Monica, California-based boutique investment bank, is selling its San Francisco office as it unwinds its mergers and acquisitions advisory business to focus on its principal investments.
Montgomery is selling the office to closely held investment-banking partnership Signal Hill, founder and Chief Executive Officer Jamie Montgomery said in an interview. The firm, which focused on advising technology startups, sold PhoneFactor Inc. to Microsoft Corp., Make Technologies to Dell Inc. and ClearAccess to Cisco Systems Inc.
“After the 2008-2009 recession, our market changed radically and we were below critical mass,” Montgomery said. “We were now doing 10 deals a year, compared to an average of 40 deals before 2008.”
Baltimore-based Signal Hill will absorb Montgomery’s 13 bankers in San Francisco, as well as its clients and intellectual property, while assuming liabilities. Financial terms weren’t disclosed.
Montgomery, founded in 1986, closed its New York office in 2008. The firm is offering severance packages to its remaining bankers in Santa Monica.
Jamie Montgomery, 53, will keep managing the firm’s existing $50 million in venture-capital investments, such as Vantage Media and ServiceMesh. He will also be advising Signal Hill on the establishment of its operations on the West Coast. His brother Michael Montgomery, 58, will step back from his day-to-day responsibilities as president of the company and complete the active mandates with clients.
Signal Hill, which advises on raising capital and focuses on high-growth companies, opened offices last year in Boston and Bangalore, India.
“San Francisco was the last missing piece of our puzzle in the U.S.,” Scott Wieler, Signal Hill’s chairman and founder, said in a telephone interview. “Technology mergers and acquisition is as frothy as we have seen in a long time.”
In March, Signal Hill advised Coyote Point Systems Inc. on its sale to Fortinet Inc. It also advised Arbitron Inc. last year in its $1.2 billion sale to Nielsen Holdings NV, and Incentive Targeting Inc. when it was sold to Google Inc. in November.
So far this year, $69.6 billion in technology and Internet deals have been announced, according to data compiled by Bloomberg, up 72 percent from $40.44 billion a year earlier.
“We are in the sweet spot, as the top-10 technology companies are continuing to add to their portfolio at an accelerating rate,” Wieler said.