M&A Adviser: Evercore
Independence pays off Investment banking boutiques have been steadily gaining market share and the largest independents now regularly rank among the top 10 investment banks in advisory fees. One has consistently been among the top five, muscling aside some of Wall Street’s biggest banks. Evercore is IFR’s M&A Adviser of the Year.
Ever since the financial crisis brought down Lehman Brothers in 2008, boutiques have been steadily building their presence in the cut-throat business of advising on major mergers and acquisitions.
Several were founded following that shakeout, but one of the oldest of the breed, Evercore, set up in 1995, coincidentally, by former Lehman investment banking co-head Roger Altman, has really come of age since the pandemic in 2020.
The firm has invested heavily in recruiting top-notch names. That policy has paid off handsomely and Evercore is now firmly in the top echelon of advisers, garnering as much in fees as several of the five major bulge-bracket banks.
Nearly 40 senior dealmakers have joined since 2020, giving the firm a roster of 145 senior managing directors. “We heavily invested in the downturn. We are no longer an M&A boutique and have not been so for some time,” says Naveen Nataraj, co-head of US investment banking.
Government connections
Altman set up the firm after a stint in the US Treasury during Bill Clinton’s presidency. That was his second spell in government following a more junior Treasury position under Democrat president Jimmy Carter.
His post-government career has seen him nurture Evercore into the booming firm it is today, working closely with former chief executive Ralph Schlosstein, another Lehman and Carter administration alumnus.
Evercore passed a critical test in 2020, setting up a successful succession strategy. They had hired John Weinberg, longstanding co-head of investment banking at Goldman Sachs, in 2016. He became CEO in 2022 and has supervised the firm’s growth.
The deal landscape fell neatly for Evercore in 2024 when big deals dominated, notably in the US energy sector. Evercore was able to pick up a string of significant mandates, either as sole or lead adviser to acquirers or targets.
Focusing on those significant transactions paid off in a year when the number of deals announced fell 14% but the total value rose 10% to US$3.17trn, according to LSEG data. The number of deals over US$5bn increased 17% to 96 and nine of the top 10 were US domestic deals.
The US is a particular hotspot for Evercore and this enabled the firm to climb one place to sixth in the league table of advisers on global completed deals. It worked on 148 deals worth US$268bn in all, with only the five major US banks ahead of it and making it the leading independent adviser.
Measured by revenues for the first nine months of 2024, Evercore’s advisory business was ahead of two of those Wall Street banks and only just behind third place, having risen 22% to US$1.59bn – faster than any of the big five.
That was a highly impressive performance, showing that this largest of the so-called boutiques really saw its business mature over the last year, as advisers on such groundbreaking manoeuvres were in demand.
Hot demand
In the red-hot energy sector Evercore alone advised ConocoPhillips on its US$22.5bn acquisition of Marathon Oil and acted for Chesapeake Energy with two other banks on its US$11.3bn merger with Southwestern Energy.
Evercore was also sole adviser to Synopsys on its US$35bn acquisition of Ansys – a transaction Evercore said showcased the breadth of its business. The acquisition was a 50:50 cash and stock deal, meaning the company needed to raise about US$16bn.
Evercore used its debt advisory team to shepherd the company through the credit rating agency process and ran a competitive bake-off between the big lending institutions. “These are capabilities that we didn’t have five years ago,” Nataraj said.
While large banks have been able to use their balance sheets to win advisory mandates, the rise of private credit may erode their influence. “We are evolving to a world, particularly on smaller deals, where private credit is a compelling alternative to the big banks,” Nataraj said.
Evercore’s reach is not limited to any sector like some of its rivals that have targeted specific sectors and geographies. Others tend to focus on acting for corporates on, for example, defence mandates. After its recent hiring spree, Evercore can cover most areas in depth.
“I can’t name a sector where we don’t have a banker,” says Nataraj. “We also have product capabilities [in capital markets] which act as a balance sheet. We have a lot of the capabilities and the same breadth of a big bank but none of the conflicts. We are quite deep and increasingly global. The US is a significant part of our business but we are increasingly building out in Europe and elsewhere internationally.”
A notable development came in 2024, when a senior team of bankers joined from Lazard in Paris, led by Andrea Bozzi, Charles Andrez and Charles-Henri Filippi.
“This is very different from how we looked at this 10 or 15 years ago,” says Matthew Lindsey-Clark, chief executive of European investment banking. “Whereas we may have chosen to select one or two people before, now we have five partners in Paris. We love crafting broad benches of people.”
The Middle East is another area where the firm wants to expand and is considering setting up an office in Riyadh, for example. “We are launching that process and putting that in place,” said Lindsey-Clark.
In terms of completed deals with involvement from EMEA, Evercore had a strong year, rising three places in that league table to ninth after advising on 60 deals, collectively worth US$94bn. The firm’s market share rose three percentage points to 10.7%.
Financial depth
Evercore also has a strong financial sponsor practice.
That came to the fore last year when it was sole adviser to Global Infrastructure Partners on its US$12.5bn sale to BlackRock. Evercore has built up a strong business helping set up continuation funds for sponsors and advising firms with related strategic issues.
Advising GIP was in a different league. “Advising a general partner on a deal involving another general partner doesn’t happen often. These are deals that don’t often see the light of day,” said Lindsey-Clark.
“This was a very large and public deal. We were seen as people who knew their way around the alternative investment market. And there was a desire not to involve lots of banks. The fewer that knew the better. That’s an advantage we have.
“Ten years ago we might have had a more niche role on a special committee on such a transaction. We have moved that to take on more lead advisory roles now.”
Evercore also advised the consortium led by KKR that completed the US$23.6bn acquisition of TIM’s fixed-line network, a highly complex deal that took more than a year and a half to complete.
The firm advised on the US$5.3bn sale of Vodafone’s Spanish assets, as well as the US$8bn acquisition of Orange’s Spanish network by MasMovil Ibercom.
Insurance consolidation
Another highlight in the financials sector was the consolidation among insurance brokers, and Evercore was involved in two significant deals.
It advised retail broker McGriff and its owner Truist Insurance Holdings, backed by private equity, on its US$7.75bn sale to Marsh McLennan.
Evercore was also lead adviser to NFP, owned by a private equity consortium led by Madison Dearborn, on its US$13bn sale to Aon. The sellers were partly paid in Aon stock, whereas Marsh McLennan paid cash for McGriff.
Elsewhere, in one of the biggest deals of 2024, the firm was one of many advisers to GE on the US$37.1bn spinoff of its Vernova power and renewables arm as GE launched its aerospace company. It had already set up GE Healthcare that was spun off in 2023.
That completed the complicated process of separating GE into three new public companies, which in all took six years, with Evercore by its side throughout. The firm used 30 different advisers to help GE and used teams from many different areas to assist in modelling various scenarios.
Finally, Evercore advised US packaging producer WestRock on its US$20.2bn merger with Irish peer Smurfit Kappa to create a world-leading business in this area that saw the combined entity move its listing to New York.
Nataraj said Evercore strives to be “understated: we prefer to be that way” but 2024 was certainly a year worth making a fuss about.
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