Moelis overtakes big boys of M&A bankers

Under Girotra, the new investment bank has cornered 6% share, with $2.12-bn deals

Moelis & Company, the global investment bank that set up shop in India in late 2012, has made it to the prestigious league of India’s top 10 merger & acquisition (M&A) bankers, overtaking established players such as Goldman Sachs and Rothschild in the first full year of its operations.

The firm, which had earlier hired ex-UBS India chief Manisha Girotra, accounted for six per cent market share, with deals worth $2.12 billion. Moelis’ success has come in a shrinking market — the value of deals dropped to $32.2 billion in 2013 from $44.2 billion a year ago.

“In the US, the M&A environment has come back, but for the rest of the world, it has been quite thin; so, if you are lucky enough to be in one or two of the large trades, you have managed to capture market share,” says Girotra. “I would like a more robust M&A platform for the country,” she adds.

Moelis is the second international firm for which Girotra is building operations from scratch. Earlier, she was the face of Swiss bank UBS in India, spending 17 years there. At UBS, she negotiated many big-ticket deals, including Vodafone’s acquisition of Hutchison Essar, United Spirit’s buyout of Whyte & Mackay and Hindalco’s acquisition of Novelis.

Now, when she is competing with investment banking giants such as UBS and Bank of America Merrill Lynch, backed by their huge balance sheets, she draws inspiration from the David and Goliath biblical tale. “We are dealing with a big bulge. So, we draw on global resources and bring together the team quickly,” says Girotra, who has a 12-member strong team in India. “Also, our executions are done by the same partner that originates the deal; so, we do not have the factory approach we need to get into the next deal. That is what we bring and that is what people are liking.”

Moelis was set up six years ago, when conflicts of interest were arising in the services of full-scale investment banks. Ex-UBS banker Ken Moelis had set up the firm as an independent investment bank focused on advisory services, not lending facilities. This year, the company plans to go public in the US.

The firm now plans to go public in the US this year, it also distributed $35 million to staff and investors in its first ever cash distribution. Globally the firm is ranked 11 in the league table with a 5.4% market share and credits for deals worth $134 billion. Some of the prominent deals internationally are the sale of ketchup maker Heinz to Berkshire Hathway in $27.4 billion deal last year.

The firm’s success in India lies in its strength of finding most suitable international buyers for the assets of Indian promoters. Moelis advised Bangalore-based Strides Acrolab for the sale of their injectibles business Agila Specialties to the US based Mylan for $1.6 billion.  Global investment bank Jefferies was also a co-banker to Strides for the deal.

It was also a banker for the Financial Technologies, the dominant shareholder in crisis-hit spot exchange NSEL, in selling its subsidiary Singapore Mercantile Exchange to the US-based InterContinental Exchange for $150 million.