Millstein acquired by Guggenheim. Thoughts?
Tittle says it all. Looks like WSJ just broke the news. Interested to see if anyone has opinions on the merger, given that guggenheim already has a restructuring team.
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Interested as well.
I think this is just the beginning- more banks will merge with each other if they sense a recession coming.
Interesting thought, what other banks do you consider as potential acquisition target. Would Evercore or Moelis potentially sell out?
I don't think so. If anything, they would be the ones building up their restructuring arms.
Zero chance, those are basically the two top performing firms right now in a frothy market and have elite restructuring teams for any downturn.
Large banks are the ones that will suffer the most when they are stuck with soft lending environments, large overhead, and continuing loss of market share on the M&A side to EBs.
Haven't we also seen Greenhill building out their restructuring arm?
Yep, they recently brought Neil Augustine over and hired a couple guys a while back when they lost their Co-Head of Restructuring
Restructuring business is slow right now. You are seeing pretty much every restructuring bank out there chase after the exact same deals. When spreads are tight and funds have capital they need to deploy, companies that should otherwise just die don't need to restructure because they can just refi. Merging with Guggenheim gives Millstein industry bankers/M&A guys with prior relationships. It also takes the pressure off of him to compensate with fees through non-restructuring engagements.
At the same time, a lot of people seem to think a real recession is coming sometime in the next two years. If you don't have the type of restructuring arm that can seriously compete for every deal, now would be the time to add to your team. Realistically speaking, Evercore and Moelis don't have any real reason to buy a restructuring arm at this point. It would be more guys like Jefferies (and Guggenheim prior to the deal) that are big in M&A but are competing for RX deals a tier below the usual suspects. Perella might be in the market for one, but I doubt Joe and Peter will be buying another bank anytime soon.
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