Evercore is comfortably the leader among the independent advisory firms, but its performance in the pandemic year also showed that it is a real competitor to the bulge bracket banks – and without the balance sheet that they have to wield. This year it wins Euromoney’s award for North America’s best bank for advisory.
In the last four quarters Evercore’s advisory revenues rose 13% to $1.9 billion. More impressively, its league table position for completed M&A deals with North American involvement in the period rose to fourth, with a market share of close to 21%. That ranking is up from sixth in the previous 12 months and is a substantial increase from its typical position of closer to eighth.
For Tim LaLonde, Evercore’s lead operating partner and co-head of US advisory, the success the firm saw during the pandemic year is the culmination of a longstanding evolution of its approach.
“We had been planting the seeds for a moment like this, quietly transforming the firm over the last three to five years by positioning ourselves to advise clients in a broader range of situations,” he says. “The decline in M&A was more than offset by activity related to debt and equity financing, liability management and restructuring.”
That mattered in the early days in particular, before central banks brought their coordinated bazookas to bear on the crisis. “In the first months the fear among corporates was whether they would have adequate liquidity to get through the crisis; and what became paramount was a combination of financing advice, capital raising and the restructuring of liabilities on the balance sheet,” says LaLonde.
He thinks that the environment also played to the strengths of an independent firm, able to provide unconflicted advice and unencumbered by the lending relationships that can often mean that the imperative for bulge bracket banks is to protect their own exposure.
The firm’s performance in the year was helped by its roles on the four largest transactions in the region. It wasn’t a driving force on the biggest of them all, the $86 billion AbbVie/Allergan merger, but it was on the other three: advising T-Mobile on its $68 billion acquisition of Sprint; Refinitiv on its $36 billion acquisition by London Stock Exchange; and United Technologies on its $32 billion acquisition of Raytheon.
We were able to offer the right approach for the times
Tim LaLonde
It wasn’t one of the biggest and it is still pending completion, but another deal that stands out for LaLonde was the announced acquisition of Chicago-based Grubhub by Just Eat Takeaway, announced on June 10, 2020 and one of the first big deals after the pandemic struck. The $7.5 billion deal, which is expected to close in July 2021, is exactly the kind of cross-border, tech-oriented situation that plays to Evercore’s strengths.
But in a demonstration of how Evercore’s business is now broader than pure M&A, it was an active bookrunner on PNC’s $1 billion follow-on offering of shares in BlackRock in May 2020, with only Citi alongside it. An equity offer was the final outcome, but plenty of other options were scrutinized.
Evercore also advised on one of the biggest private investment in public equity (Pipe) deals at that time, a $1.1 billion investment in Expedia by Apollo Global Management and Silver Lake, where Evercore was advising the buyers alongside Goldman Sachs. That the deal came in April 2020 again showed how Evercore was at the heart of the opportunities that were being found at a turbulent time.
Key to its success was a shift in the way the firm looks at its business. “It was not about running out and just doing the next M&A deal,” says LaLonde. “We instituted advisory-wide calls every day with our financing and liability management teams to talk about Pipes, private placements, restructurings and everything to do with the art of the possible in the equity markets.
“We were able to offer the right approach for the times.”
