Who’s Behind the Best Deals

Most transactions wouldn’t make it past a handshake if it weren’t for the advisors working quietly and diligently behind the scenes.

“Advisors are a key part of the deal-making process and need to be engaged from the beginning,” says Rick Childs, a partner at Crowe LLP.

These advisors include legal teams and investment advisors for both the buyer and seller, as well as other professionals who assist with modeling, accounting and due diligence. They give critical advice to their clients, and that honest guidance can be hard to find, says Alberto Paracchini, the CEO of $5.4 billion asset Byline Bancorp, based in Chicago. Good advisors are “almost like an extension of your organization and of your team,” he says.

Unlike the other categories presented in the 2020 RankingBanking study, which analyzes and ranks the best M&A transactions, this final category doesn’t disclose the best advisors or present a league table tallying the number of deals by firm. Instead, the accompanying table details the winning deals per category, along with the legal team and investment firm that advised the buyers.

The ranking identifies a wide variety of advisors working to execute these top deals. You’ll find big international firms like Debevoise & Plimpton LLP and smaller shops like Brooks, Pierce, McLendon, Humphrey & Leonard LLP. Some even use in-house expertise, like Nashville, Tennessee-based FB Financial Corp.

“We don’t always use an advisor,” says Christopher Holmes, FB Financial’s CEO. The $5.9 billion asset bank employs a former investment banker in house who can handle smaller, less complex transactions. Beyond that, Holmes seeks outside help.

“We have an important relationship with a big, moneycenter type advisor and if it’s a bigger, complex [transaction], we may get them,” he says. Mid-sized deals tend to go to smaller firms with a working knowledge of that type of target. FB Financial ranked third in the market reaction category for its acquisition of American City Bank and Clayton Bank & Trust. Stephens and Alston & Bird advised on the deal.

“It’s best to already have built a relationship with your advisors before diving into a deal,” says Kara Baldwin, a partner at Crowe. “It’s important you find the right fit for your organization.”

James Ryan III says the team at Evansville, Indiana-based Old National Bancorp spends significant time with the bank’s advisors so they understand its strategy, values and how the institution defines success. “We spent a lot of time educating them so when they’re out, they [can] represent us,” says Ryan, Old National’s CEO. The $20.4 billion asset acquirer ranked fifth in the large bank category for its acquisition of Anchor Bancorp, in St. Paul, Minnesota. Keefe, Bruyette & Woods and Krieg DeVault advised on the deal.

“The key indicator is really the relationship,” says Childs. “You are looking for an advisor with expertise, which seems like a given, but more importantly you are looking for an advisor who shares your vision.”

Investment bankers play a key role in identifying potential targets for acquirers. They also model the financial aspects of the deal. But it’s critical that the bank ensure that they’re getting the correct information, says Jeffrey Ludwig, the CEO of Effingham, Illinois-based Midland States Bancorp. “You need to make sure you understand their models,” he says. “They run the numbers, but we do a lot of work here to double check and make sure that the numbers they’re running make sense.”

The $6.1 billion asset bank ranked second in the mid-sized category for its acquisition of Belvidere, Illinois-based Alpine Bancorp. Barack Ferrazzano Kirschbaum & Nagelberg and Keefe, Bruyette & Woods advised on the deal.

Building trust is as critical with the bank’s legal team as it is with its investment advisors.

“You have to find people on both the legal side of it, as well as on the financial side, that have the same type of alignment that you have with the transaction, and people that [will] be perfectly comfortable challenging you on your assumptions and giving you sound advice — and sometimes that may mean telling you that you should not pursue the transaction,” says Paracchini at Byline. Byline placed fifth in the market reaction category for its acquisition of $1.2 billion asset First Evanston Bancorp, in Evanston, Illinois. Keefe, Bruyette & Woods and Vedder Price advised on the transaction.

Beyond trust, legal advisors bring invaluable knowledge and expertise to the table.

“I think the No. 1 piece of advice is [to] find a firm with deep experience in bank M&A,” says Childs. “You need a firm [that] has the experience and the relationships with regulators. Resume and credentials matter.”

Midland States values this expertise so much that Ludwig brought it in house. As the bank’s corporate counsel and senior vice president, Douglas Tucker brings extensive experience in acquisitions, capital raising and SEC reporting. “He’s helping us look at deals, structure deals, raise capital — more strategic types of things,” says Ludwig. “[He] provides us with a good internal voice in the boardroom, and he’s a good sounding board as a corporate counsel.”

While advisors are critical, banks also need the in-house expertise to work with the advisors and frankly, keep them honest.

“As we’ve scaled larger, we’ve built a stronger team internally and that provides a greater challenge to the advisor,” says Dennis Hudson III, the CEO of $6.9 billion asset Seacoast Banking Corp. of Florida. “Those firms are dealing with more people that are going to call them out if we catch them not being meticulous.” The Stuart, Florida-based bank topped the category for best M&A strategy. Alston & Bird advised on the bank’s three most recent deals.

Who’s Behind the Best Deals

CATEGORYWINNING DEALLEGAL ADVISOR
(ACQUIRER)
INVESTMENT
ADVISOR
(ACQUIRER)
BEST LARGE BANK DEALValley National Bancorp /
USAmeriBancorp
Day PitneyKeefe, Bruyette & Woods
BEST MID-SIZED BANK DEALCenterState Bank Corp. / HCBF Holding Co.Alston & Bird LLPKeefe, Bruyette & Woods
BEST COMMUNITY BANK DEALTexas State Bankshares / Blanco National HoldingsUndisclosedUndisclosed
BEST MERGER OF EQUALS Union Bank / Union Banc Corp.Brooks, Pierce, McLendon, Humphrey & Leonard LLPBanks Street Partners
BEST DEAL BY MARKET REACTIONVeritex Holdings / Sovereign BancsharesNorton Rose Fulbright USStephens
BEST BRANCH NETWORK ACQUISITIONPeople’s Utah Bancorp / Banner Corp. Nolan, Taylor, Dorsey & WhitneyD.A. Davidson & Co.
BEST TECHNOLOGY ACQUISITIONKeyCorp / HelloWalletCalfee, Halter & Griswold LLPInternal
BEST STRATEGIC NONBANK ACQUISITIONCitizens Financial Group / Franklin American Mortgage Co.Debevoise & PlimptonInternal
BEST M&A STRATEGYSeacoast Banking Corp. of FloridaAlston & Bird
3 of 5 deals
Raymond James & Associates
2 of 5 deals