Raymond James Wins Biggest Deal on $15 Billion Mobileye Sale

Updated on
  • Bankers Uhrig, Tobin, Maxwell said to work on Mobileye sale
  • Shares of Raymond James advance, extending 2017 rally

Raymond James Financial Inc., the investment bank that’s been an afterthought for years among mergers-and-acquisitions dealmakers, won its largest-ever advisory role by helping Israel’s Mobileye NV reach an agreement to sell itself to Intel Corp. for about $15 billion.

The win catapulted the St. Petersburg, Florida-based investment bank to the No. 20 ranking in 2017 among M&A bankers, according to data compiled by Bloomberg. Through Sunday, the company was at No. 79, similar to its standing in prior years.

The investment bank traces its roots to a mutual fund brokerage and is known for advising wealthy individuals. Those businesses helped generate steady returns for Raymond James, which posted more than 100 straight profitable quarters, with the stock climbing more than fourfold since the end of 2008. The company has been expanding more recently in M&A advice by hiring from Wall Street rivals and taking over smaller firms.

Raymond James’s relationship with Mobileye goes back to the tech firm’s 2014 initial public offering, when shares sold for $25 apiece. The Israeli company has since appeared at the broker’s signature annual conference, presenting to institutional investors in Orlando, Florida. The Intel transaction, with the buyer agreeing to pay $63.54 per share, highlights the benefits of the relationship. It also increases the brokerage’s prestige, said Ann Dai, an analyst at Keefe, Bruyette & Woods.

‘Reputation Business’

“It’s a reputation business,” said Dai. “Anytime you’re named on a big deal, it’s good for the firm.” 

Previously the largest deal for Raymond James was AmSouth Bancorp’s sale in 2006 to Regions Financial Corp. for about $10 billion, according to data compiled by Bloomberg. The bank also advised BioMed Realty Trust Inc. on the sale last year to Blackstone Group LP for more than $7 billion, including debt.

Fees for advising a seller on a deal the size of the Mobileye transaction are typically about $35 million to $40 million, said Jeff Nassof of Freeman & Co., a consulting firm. While Raymond James is the sole financial adviser listed for the Israeli firm, its payout will probably be smaller, given that Mobileye needed fewer banking services than sellers in many megadeals, said a person familiar with the transaction.

The Raymond James dealmakers on Mobileye are Charles Uhrig, who leads the communications team, Jeff Maxwell, head of mergers and acquisitions, and Geoff Tobin, according to the person, who asked not to be identified discussing private negotiations.

Citigroup Inc. and Rothschild Inc. are the bankers for Intel, which hired Skadden Arps Slate Meagher & Flom for legal advice, according to a statement. Mobileye hired Morrison & Foerster as its law firm.

Raymond James, led by Chief Executive Officer Paul Reilly, rose 34 cents to $79.64 at 1:11 p.m. in New York, extending its gain this year to 15 percent. The investment bank was named March 10 to join the S&P 500 Index.