Quattrone Lands Top Technology Deals Selling Motorola, Autonomy
August 19, 2011, 2:32 PM EDTBy Serena Saitto
Aug. 19 (Bloomberg) -- Frank Quattrone’s Qatalyst Partners is closing in on larger rivals Goldman Sachs Group Inc. and Morgan Stanley after winning lead advisory roles on the two biggest technology takeovers of 2011.
The firm worked with Autonomy Corp. on its $10.3 billion sale to Hewlett-Packard Co., the biggest software deal since at least 2008, according to data compiled by Bloomberg. San Francisco-based Qatalyst also advised Motorola Mobility Holdings Inc. on the $12.5 billion takeover by Google Inc., the top wireless-equipment transaction in more than a decade.
The deals propel Qatalyst, founded shortly before the collapse of Lehman Brothers Holdings Inc. in 2008, to fifth place among advisers on technology deals from 10th in 2010, the data show. Quattrone and partner George Boutros are profiting from decades-old ties in Silicon Valley, said Lise Buyer, principal at IPO advisory firm Class V Group in Portola Valley, California.
“They had a real desire to take off the ties and roll up their sleeves,” said Buyer, who worked with Quattrone and Boutros at Deutsche Morgan Grenfell and Credit Suisse Group AG from 1997 to 2000. “The entrepreneurs they helped all those years ago are the board members of today.”
Quattrone worked on almost 200 initial public offerings for technology companies in the 1990s, including Amazon.com Inc., Cisco Systems Inc. and Netscape Communications Corp. He founded Qatalyst after a five-year hiatus from the industry, during which he successfully defended himself against allegations he hindered an investigation of the firm’s IPO practices.
Quattrone, 55, declined to be interviewed for this story.
Top Tech Advisers
Qatalyst’s five deals in 2011, valued at about $27 billion, put the firm behind Goldman Sachs, Morgan Stanley, Bank of America Corp. and Barclays Plc on technology mergers, data compiled by Bloomberg show. In Google’s bid for Motorola Mobility, Barclays also advised the target, while Lazard & Co. provided financial counsel to its Mountain View, California- based suitor.
Qatalyst extracted premiums of more than 60 percent for Autonomy and Motorola Mobility investors. The firm is set to reap $85.8 million in fees from its 2011 technology deals, said Lam Nguyen, vice president at New York-based research firm Freeman & Co.
“Qatalyst has a track record of advising the sell side which always gets paid 10 to 15 percent more than the buy side for the premium they can negotiate for their clients,” Nguyen said. “Being a boutique, they don’t have the balance sheet to provide financing to the buyer.”
Boutiques’ Ascent
Another boutique investment bank, Perella Weinberg Partners, got top billing for advising HP on the purchase of Cambridge, England-based Autonomy alongside Barclays, which is arranging debt financing for the transaction. Autonomy also received advice from Bank of America, Citigroup, Goldman, JPMorgan Chase Co. and UBS AG. Morgan Stanley wasn’t on the deal, dropping to No. 2 behind Goldman Sachs in technology deals this year.
Mergers and acquisitions volume in technology has increased 70 percent in 2011 to more than $140 billion compared with the same period a year ago, as companies delve into their cash hordes to spend on cloud computing and security services.
Boutros and Quattrone’s partnership dates back to their work at firms including Morgan Stanley, Deutsche Bank and eventually Credit Suisse. Boutros, recruited by Quattrone as senior partner last year, led the team advising Libertyville, Illinois-based Motorola Mobility.
He remained at Credit Suisse after Quattrone left in 2003 and was one of the firm’s top dealmakers in San Francisco, advising on more than 300 transactions, including Sun Microsystems Inc.’s sale to Oracle Corp. They had just reunited last year when Qatalyst advised Palm Inc. on its $1.2 billion takeover by HP.
That expertise has made them among the most sought-after advisers in Silicon Valley, said Class V Group’s Buyer.
“It’s sort of like ‘Ghostbusters,’” she said. “When you’re doing M&A, ‘who you gonna call?’”
--With assistance from Aaron Ricadela in San Francisco. Editors: Julie Alnwick, Marcus Chan
To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomberg.net.
To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net.
