KeyBanc To Acquire Pacific Crest Securities

I will give my two cents. First and foremost, I am always weary about banking acquisitions; they rarely work. On the flipside, I think this is a very interesting deal for both parties.

Huge move by Key to build out west coast banking practice and be a major player in the tech middle market. Frankly, it is a ballsy move, going very long on high growth tech, which many argue is a bubble. With the growth Pac Crest has seen over the last few years, I am sure they were not a cheap purchase either.
I think this should be solid for Pac Crest as Key's balance sheet will greatly benefit the firm. If they leverage the Key platform the way they should, they should be more competitive in winning larger M&A mandates .. staple financing at its finest. The tremendous growth Pac Crest has seen in the last few years is due to the hiring of several heavy hitter bankers. Wouldn't shock me if these guys bounce as soon as their guarantees expire, which frankly is all of the deal flow.

From my understanding (I have a close friend who spent some time there), there are some senior guys who have stuck around forever and don't really do shit. Smaller, employee owned banks attract rain makers by offering them the upside of equity and options. Well now that these option have been exercised, what will keep these guys at Pac Crest? Why not go to a small shop and hope for an exit all over again? Or if you want to be at a public company, go work somewhere that is going to pay you better than a KeyBanc. What I just outlined is why banking acquisitions almost always fall apart. Revenue is driven by the senior bankers. These senior bankers almost always jump ship after their guarantees / contracts expire.

Still, a very interesting deal and am curious to see how it all shakes out.