Bank of Montreal, which advised on deals involving two Canadian premier hockey teams in the past five years, is targeting North America’s sports industry to bolster its U.S. mergers-and-acquisitions business.
The firm is looking to expand its sports-advisory business to win mandates on deals from $500 million to $5 billion, said Lyle Wilpon, head of U.S. mergers and acquisitions at BMO Capital Markets in New York. Targets include Major League Baseball, the National Football League, National Basketball Association and National Hockey League, he said in an April 16 interview.
“We have put a big emphasis on that particular area,” said Wilpon, 47, whose father is a cousin of New York Mets owner Fred Wilpon. “I think it will show some fruits for the effort.”
Wilpon plans to build on Bank of Montreal’s successes with hockey deals in Canada. The Toronto-based firm advised BCE Inc. on its acquisition of 37.5 percent of Maple Leaf Sports & Entertainment, owner of the NHL’s Toronto Maple Leafs and the NBA’s Raptors, from Ontario Teachers’ Pension Plan in August 2012. The firm also advised the Gillett family on the sale of the Montreal Canadiens NHL franchise in 2009. Darryl White, BMO Capital Markets’ head of global investment and corporate banking, is on the Canadiens board.
Sports advisory is a crowded and competitive field with almost all of the big banks, including Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., as well as some boutique firms having advisers dedicated to team and league transactions. Still, Wilpon sees a chance for Bank of Montreal to build on its NHL expertise and target other leagues and owners, whose holdings may lead to additional opportunities.
“If you think about who the owners are of major sports teams, having them as clients very frequently leads to a portfolio of companies they own, a portfolio of relationships they have, a consortium of owners that are part of their ownership group,” Wilpon said. “It’s a very, very fulfilling cycle. It leads to many places.”
Bank of Montreal also has naming rights on sports facilities, including the BMO Field soccer stadium in Toronto and BMO Harris Bradley Center in Milwaukee, home to the Milwaukee Bucks NBA franchise. Last week, Avenue Capital Management’s Marc Lasry and Fortress Investment Group LLC’s co-founder Wesley Edens bought the Bucks for about $550 million from former U.S. Senator Herb Kohl.
Bank of Montreal hired Wilpon in January from Los Angeles-based boutique firm Houlihan Lokey to head its U.S. M&A business. He previously spent more than a decade at Bank of America and Merrill Lynch, where he ran the firm’s middle-market M&A group and headed the sports advisory practice. He also was a health-care banker at Credit Suisse First Boston. He said he hasn’t capitalized on his family link to Fred Wilpon.
“I don’t frown upon the advantage it might give me, but I’ve never really had to tap into it,” he said.
Sports-advisory is among several strategies Lyle Wilpon has pushed since joining Bank of Montreal’s investment bank, which positions itself as an adviser for middle-market companies with market values of between $200 million and $500 million, as well as larger firms with market values of as much as $5 billion. He is also seeking to gain greater access to the boardrooms of public companies, including developing an expertise to provide firms with a defense against activist shareholders.
“There are untapped opportunities within BMO that we could do an even better job at than we have,” Wilpon said. “Part of that vision is to find greater M&A opportunities that are ours to have out of the commercial bank.”
Bank of Montreal, whose traditional investment-banking strengths are in Canadian mining and energy, has never captured more than 2.2 percent of the market share for U.S. deals. Its investment bank ranked 32nd last year for announced takeovers involving a U.S. company after advising on 40 transactions totaling about $40 billion, according to data compiled by Bloomberg. In 2012, it arranged 37 deals with a value of about $25.4 billion and ranked 26th.
Bank of Montreal advanced 7.8 percent this year in Toronto trading through yesterday, after a 16 percent gain last year.
This fiscal year is showing promise for BMO Capital Markets, with five announced or completed U.S. deals of more than $1 billion since Nov. 1. “Year to date, we’ve done more billion-dollar transactions than at any time in the history of the U.S. franchise,” Wilpon said.
The firm has another half dozen or so mandated deals in the pipeline above $1 billion, he said.
“The current estimation on every one of those transactions is they will happen this year,” Wilpon said. “To me that’s a very good leading indicator of where our business is headed.”