ot continuation. Article from back in February re: ML.
Merrill Lynch has made big inroads in Canada. If only it could bring itself to blow its own horn
By Keith Kalawsky | Issue date: Feb.19, 2001
Ron Lloyd seems a little, well, torn. On one hand, the affable head of investment banking at Merrill Lynch Canada Inc. is aching to advertise that his shop is not some second-class boutique firm that scurries for the leftovers of the bank-owned firms. Indeed, Merrill Lynch is now a major-league player, handling an expanding share of the most lucrative mergers and acquisitions, IPOs and corporate debt issues coming down Bay Street. On the other hand, it's something of an unwritten rule in investment banking circles, especially in conservative-minded Canada, not to spout off publicly about all the business you're pulling in. Nobody wants to look like a self-absorbed egomaniac, let alone jinx his success. Yet, at a recent meeting in Ottawa, Lloyd was flabbergasted that many people considered Merrill Lynch Canada a tiny, insignificant branch of its US parent—although it has 4,000 employees above the 49th parallel. "It's very easy to lump Merrill Lynch with the rest of the global firms that operate in Canada," he laments. "We have a very strong local presence." So Lloyd will talk—a little. "This isn't about me," he protests when asked about his background in the business. "This is about a world-class team of bankers coming together."
Clearly, it's not easy for Lloyd, this whole blowing-your-own-horn thing. But a little gloating is in order. In the past 18 months, Merrill has impressively bolstered its market share. In 2000, it snagged 24.4% of mergers and acquisitions activity, leapfrogging traditional industry powerhouses, such as CIBC World Markets, to fourth place overall. Propelling this improvement were immense deals such as the sale of Cadillac Fairview in March to the Ontario Teachers' Pension Plan Board for $5.15 billion and Husky Oil's $4-billion acquisition of Renaissance Energy in August. To put this in perspective, Merrill was an embarrassing 10th in M&A activity in 1999, with a market share of just 9.7%. Merrill is also the leading player in equity issues, having raised US$750 million for Celestica and more than $1 billion for C-Mac Industries last year.
Until recently, Merrill hadn't exactly been taking Canada by storm. After shelling out more than $1.3 billion to buy Midland Walwyn in 1998, Merrill Lynch Canada floundered as the black sheep of its parent's thriving US operations. But today, the US and Canadian divisions are tightly integrated (Lloyd reports directly to New York). With a global presence, Merrill has a leg up on domestic-oriented firms in marketing deals and accessing resources and expertise worldwide.
Sure, it might just be a coincidence that Merrill's turnaround began with Lloyd's arrival in 1999. He had worked his way up to co-CEO at Gordon Capital Corp. before leaving for Midland Walwyn, where he ran the equity capital markets group. After managing acquisitions for Barrick Gold Corp., he joined Merrill, orchestrating deals in its telecom and media group. He replaced Rob Grandy at the helm in February 2000. Lloyd and his team developed a three-year plan to get Merrill on track, for good. "Nobody wanted to be a flash in the pan," he says. Lloyd split the bank into industry groups to develop expertise in all sectors. He forged stronger links with Merrill's equity and debt traders to generate business. And he began hiring the kind of talent needed to bag the big deals. Last summer, for instance, Lloyd wooed Marianne Harris from RBC Dominion Securities, where she had brokered deals in financial services for 16 years. She'll play a big role for Merrill this year, considering the continued consolidation in financial services and the next round of bank mergers.
Will the investment bank sustain its rapid growth? We've witnessed an almost unprecedented heyday of dealmaking that saw Merrill scoring big in the euphoric technology sector. But those days are gone. Instead, Lloyd is focusing on consolidation in the energy sector, encouraged by record-breaking cash flows. And he expects the issuance of corporate debt to swell. Not surprisingly, he stops short of promising another huge year. "While we were pleased with the results of last year, we're not satisfied with them" is all he'll say. To be sure, the bank-owned shops will find themselves in a no-holds-barred battle. Perhaps Merrill will come out on top. Maybe then Lloyd can finally relax and enjoy the moment.
=-=-=-=--=
prnewswire.com
Merrill Lynch Closes Acquisition of Midland Walwyn to Create a Leading Financial Services Firm in Canada
NEW YORK and TORONTO, August 26 /PRNewswire/ -- Merrill Lynch & Co., Inc.
announced today that it has finalized its acquisition of Midland Walwyn Inc.,
Canada's largest independent full-service securities firm. The closing of the
acquisition was completed in a pooling of interests transaction with an
estimated value of US$810 million (C$1.255 billion), or US$20.72 (C$32.10) per
Midland Walwyn share.
The combined entity, to be led by an integrated executive team from
Merrill Lynch and Midland Walwyn, becomes a leading firm both in Canada and in
the global markets. It is one of the top three firms in Canada in the private
client brokerage business, investment banking, and securities trading.
Merrill Lynch Chairman and CEO David H. Komansky said: "We look forward to
quickly completing the integration of our two firms, allowing us to offer
expanded opportunities for both our new clients and new employees in one of
the world's most promising markets."
Merrill Lynch Canada Chairman and CEO Robert B. Schultz, formerly CEO of
Midland Walwyn, said: "Our combined firm will enable us to catapult over the
competition and significantly accelerate our growth strategies with a goal of
becoming Canada's number one securities firm."
Based on the closing price on Aug. 25 of US$86.3125 for Merrill Lynch
stock, an exchange rate of C$1.5495 for US$1, and the transaction's exchange
ratio of 0.24 to 1, the transaction has a current, estimated value of
C$32.10 per Midland Walwyn share.
Merrill Lynch has been operating in Canada since 1952. It is one of the
world's leading financial management and advisory companies, with offices in
45 countries and total client assets of $1.4 trillion. As an investment bank,
it is the top global underwriter and market maker of debt and equity
securities and a leading strategic advisor to corporations, governments,
institutions, and individuals worldwide. Through Merrill Lynch Asset
Management and Merrill Lynch Mercury Asset Management, wholly owned
subsidiaries, the company is one of the world's largest managers of financial
assets. |
