Evercore Partners, the US investment bank, is set to bolster its position in Europe with a deal to buy Lexicon Partners, the London-based advisory firm, for about £86m ($141m).
Evercore, founded in 1996 by Roger Altman, the former US deputy Treasury secretary, has set its sights on expanding globally as demand for independent banking advisers grows in the wake of the financial crisis.
The cash-and-stock deal for Lexicon will see Andrew Sibbald, Lexicon’s co-founder and senior partner, assume control of Evercore’s efforts in Europe as chief executive of the advisory business in the region.
Bernard Taylor, chairman and chief executive of Evercore’s European business, will continue as chairman.
About two-fifths of the deal consideration will be paid to Lexicon’s partners at closing, people close to the deal said. The remainder of the purchase price will be paid over several years and be largely in Evercore stock, they added.
In September Evercore teamed up with G5 Advisors in Brazil, taking a 50 per cent stake in the São Paulo-based adviser. Evercore also this month announced a partnership with Woori Investment & Securities in South Korea, adding to similar alliances focused on cross-border dealmaking in China and Japan.
The bulk of Evercore’s 600-plus strong workforce is still in the US. The deal with Lexicon will almost triple its headcount in the region.
While it has in the past relied on strategic partnerships to extend its global reach, people familiar with Evercore’s thinking said the bank had a preference to buy where it could. Evercore has also been adding to its US ranks.
It has hired Tony Magro, the former vice-chairman of global investment banking at Bank of America Merrill Lynch, Ray Strong, an energy banker from Goldman Sachs, and Eric Mandl, a technology and software specialist from UBS.
The bank has had a good year in advising on mergers and acquisitions. Evercore was among AT&T’s bankers in its $39bn deal to buy T-Mobile USA from Deutsche Telekom and also advised Lubrizol, the US chemicals company, on its $9bn sale to Warren Buffett’s Berkshire Hathaway.
Though smaller in Europe, Evercore has also been having a good 2011. So far this year, the bank is ranked 13th in European M&A, according to Dealogic, up from 21st last year. It advised Lafarge on the formation of a UK construction materials joint venture with Anglo American’s Tarmac.
Lexicon was founded in 2000 and is focused on providing advice to clients in the financial services, utilities, infrastructure and energy sectors. It has about 100 employees and offices in London, New York, Hong Kong and Aberdeen.
The boutique was set up by Mr Sibbald with other financial institutions bankers from Donaldson, Lufkin & Jenrette, but has since diversified into other sectors.