SoftBank’s Boutique-Led ARM Deal Means $165 Million in Bank Fees

  • Goldman Sachs was the only top-five, lead bank on the deal
  • Sellside and buyside to split $50 million to $60 million each

SoftBank Group Corp.’s acquisition of U.K. semiconductor designer ARM Holdings Plc, the biggest ever Asia-to-U.K. takeover, may yield up to $165 million for the boutique-dominated group of banks working on the deal.

SoftBank advisers, including Raine Group LLC, Robey Warshaw LLP and Mizuho Financial Group, will split $50 million to $60 million, according to estimates from Freeman Consulting Services. Cambridge-based ARM’s advisers, including Goldman Sachs Group Inc., the only top-five U.S. investment bank in a lead role, as well as Lazard Ltd., will likely get the same. Banks who arranged bridge financing for the deal will get about $45 million, the firm said.

In a year that’s been a disappointment for M&A, the deal is also contributing to the trend of smaller, so-called boutique banks landing roles on large transactions. Raine, which specializes in technology, media and telecommunications deals, previously worked on SoftBank’s takeover of a majority stake in Sprint Corp., as well as the sale of the Tokyo-based company’s mobile games company Supercell Oy to Tencent Holdings Ltd.

It’s the second major coup for Robey Warshaw this year after London Stock Exchange Group Plc drafted the British bank as its lead adviser in the exchange’s tie up with Deutsche Boerse AG. The firm also counts Vodafone Group Plc, SABMiller Plc and AstraZeneca Plc among its clients.

Robey Warshaw

Robey Warshaw, which typically advises U.K. companies, was hired by SoftBank, in part, to provide expertise on the British market, according to people familiar with the matter, who asked not to be identified because talks are private. Raine Group has SoftBank Chairman Masayoshi Son on its advisory board.

Robey Warshaw’s insight may have been particularly important because of the U.K.’s June vote to leave the European Union, which has raised concern about the outlook for the economy and boosted domestic political pressure to secure investments and jobs in the country. Still, the Brexit vote and the pound’s subsequent decline against the yen and the dollar was not a factor in SoftBank’s decision, Son said Monday.

SoftBank said it agreed to buy ARM, whose chip designs are found in 95 percent of the world’s smartphones, for 24.3 billion pounds ($32.2 billion) on Monday, making it one of the biggest deals announced this year. The banks fortunate enough to get roles on the deal have also moved up the league tables.

League Standings

Mizuho jumped to 17th position from 23rd on Friday, according to data compiled by Bloomberg measuring banks’ market share on deals so far this year. Raine rose to 21st from 36th while Robey Warshaw climbed to 24th from 41st. Lazard moved ahead one spot to seventh place, while Goldman maintained its position at No. 1.

UBS Group AG and Barclays Plc are acting as joint corporate brokers to ARM, and UBS also has a role as a financial adviser.

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