This edition of The Dealmaker Quarterly showcases our Deal Awards, which might be considered M&A’s Oscars were our efforts just another exercise in self-congratulation. But they’re not. Consider our award for Deal of the Year, which we’ve bestowed upon CVS’ acquisition of Aetna. The deal now faces a regulatory obstacle belatedly erected by Judge Richard Leon on the same obscure grounds he used to take a last look at AT&T’s deal with Time Warner. Indeed, antitrust law contains a heretofore little-noted provision that allows a judge to sign off on regulatory agency approval based on whether he or she considers the transaction in question to serve the public interest. Quite a vague formulation, that, and with Leon activating it again, the CVS-Aetna deal requires more than the usual financial and legal dealcraft. More broadly, the situation reflects a much tougher regulatory environment than that of only a few years ago and one likelyto challenge more and more big deals as the political zeitgeist now includes a decided backlash against corporate gigantism. Hence the calls emanating from Washington to break up Big Tech. Given all that, CVS-Aetna is a bellwether worthy of study whether it closes or not, and thus more than qualifies in our book as Deal of the Year.
Our Q2 Dealmaker also delves deep into what we’ve come to call The Mighty Middle, that is, middle-market dealmaking that seems to defy the usual capital-market fear and froth, and thus continues to attract the attention of private equity, especially firms turned off by high valuations in the public, large-company sphere. In fact, Steve Gelsi’s focus in his feature for the package is on how valuations in this space have also begun to inflate and would threaten to make a problem of PE firm size were it not for a spate of newcomers. There’s also naturally a place for boutique banks here, which drew our attention to Greenhill’s new energy dealmaker Ali Akbar, who recently exited RBC and sat down with Tom Terrarosa to discuss how his career will change now that he’s no longer part of the bulge bracket.
Finally, this edition also includes our improved list of top PE advisers, which largely reflects the handiwork and acumen of David Marcus, who combed through data with Matt Haas’ expert help and picked the brains of legal sources in the M&A world to determine to whom PE firms turn most readily and on what basis. We submit that our list is quite unique and as definitive as any such effort could be on this go-around. We also think it’s a keeper and will update it annually, as you’ll notice we are now doing with our award programs. Congrats to all the winners and to you for reading about them and the rest of this issue.
By // Ron Fink, Deputy Managing Editor