Evercore ISI

Good move.

It's unfortunate because ISI has some of the best analysts out there. I have a feeling the quality/objectivity of their analysis will go downhill post acquisition. Not sure how this affects the deal Evercore is getting, but realistically they are buying it as a marketing function for their bankers, and to prop up the cash equities business, not as a best-in-class research product.

Investors hate this deal, but I don't think it's that terrible, and at $46 yesterday stock was a no brainer. They needed to either sh*t or get off the pot in equities...only in two verticals previously and the multiple would still feel it. Now they'll at least be in every sector, and ISI is respectable with a good client list.

Deal structure is a heads we win, tails we don't lose much and basically a free option on any ECM underwriting fees their bankers can siphon off. I'm up in the air whether having coverage matters much to recruiting M&A bankers, but in this new era of recovered bank stock prices, maybe balance sheets start to matter as rates rise and it gets harder to pry away talent.

Pretty good there. +1.

Qazi Fazal (whom I worked with previously) is a bright guy. I think a team of superstars like Evercore's will gain from this merger, with a larger presence in research. Their market cap is ~1.73 Bn.

Posted a thread on some of the questions this deal raises last night:

http://www.wallstreetoasis.com/forums/boutique-vs-full-service-where-do…

Curious about how this will affect their advisory practice. I always considered Evercore as one of my top choices for a fulltime analyst stint because they have a great reputation in M&A advisory and are also very good in RX which is another area I'm interested in. How will this deal affect their banking?

Obviously a move to boost their capital markets business. Research coverage drives cap markets and cap markets is basically free money. Despite what a summer analyst may think, banks exist to make money. Advisory is cool and gets the headlines but if you were running a bank would you rather focus all efforts on M&A processes that take 100's of man hours, may fail and at best yields a few million bucks or spend an evening on a right book equity process and make a million (rinse, wash, repeat).

I think people get that banks exist to make money, but I also think that if they are like me, they are more interested in the advisory process and less so capital markets.