Smallest M&A deal sizes in the MM like RJ, Piper, HL etc
Title is pretty self explanatory. Anyone with any insight could provide the smallest deal sizes that would get through? Would anything around 20 or 30 mil be sufficient enough?
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Less about deal sizes, more about fee structure and how that works. If it makes a minimum fee hurdle it could be v low, but that’s relative to what a potential client would pay.
Overall EV isn’t as critical at the lower end, more finding the economics to make a deal work.
$20-$30m isn’t really enough for those banks as they will have a minimum fee in the $1.5m - $2.5m range. Wouldn’t really make sense for a company to hire them when ~10% of the money from the sale would be a fee to the banker. That being said, if the company did agree to the fee the bank would do the deal.
FWIW from what I have seen if it’s an important relationship and that small deal is like packaged with other bigger deals / fee generating events for the bank, they could justify compromising and spending resources to help execute a smaller deal every now and then
This. I worked on a tiny sell-side M&A deal (~$50 MM EV) which was honestly below our bank minimum of $4 MM but we took it on because of an implicit understanding that we would get the sell-side on a ~$1.5 Bn EV later that year - which we ended up getting as a result.
When I worked at HW I think our minimum fee was 2 or 2.5mm. The smallest deal I personally worked on was ~$150mm TEV, didn’t see anything smaller than that really.
As with most things, the answer is - it depends. If the market is slow and you have directors desperate to prove they can generate deal flow/fees, you might see one of those banks go downmarket, so long as the client swallows the minimum fee. Some owners want to brag about using a MM name brand vs. a boutique.
Generally, you won't see those names much under $100 million unless the market is very slow (which it has been). I've seen HW on a $5 million EBITDA business, Piper was repping some small sell sides (sub-$10 million EBITDA), etc. in the past year or two. You wouldn't have seen any of them touching deals less than $200 or maybe $250 million in 2021 because of how busy things were.
That being said, imagine how shitty of client service you are going to get on a small deal from a big bank. You aren't going to be even thought about on a daily basis, compared to the multiple clients in the hundreds of millions or billions of dollars.
Lincoln
Yeah saw a deal they did in 2022 for 40 mil
For HL, BAIRD, WB you likely won't see any deals below TEV 200-250mm range (deal size average around 500-800mm) but it also depends on which industry. RJ, Piper, Lincoln and HW operate more in the lower MM but not too sure.
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