THREE corporate advisory firms, each with a very different profile, stood out as market leaders in the mergers and acquisitions sector last year.
Macquarie Capital, Hartleys and UBS were the top performers, judging by the number and value of Western Australian transactions handled.
Coming in behind them were accounting firm Ernst & Young, specialist advisory firm Gresham, and local investment bank Azure Capital, which have consistently been among the major M&A players in the WA market over the past decade.
Other competitors include local firms Argonaut, PCF Capital and a relatively new player, Miro Advisers, along with accounting firm KPMG, which is bolstering its presence in the M&A sector.
Global investment banks continued to have an impact, with Merrill Lynch beefing up its presence in Perth, while others such as Credit Suisse, Goldman Sachs and Rothschild continue to service Perth with fly-in, fly-out advisers.
Among the market leaders, Macquarie handled the largest number of WA transactions with the highest value, helped by its national and international network.
Led by Michael Ashforth, who moved from Gresham to Macquarie two years ago, it worked on 13 WA-related transactions with a combined value of $10.8 billion, including for clients based in Sydney, Melbourne, Darwin and London.
These included advising Rio Tinto on its $4 billion acquisition of Africa-focused coal miner Riversdale Mining, advising Leighton Holdings on the sale of its HWE contract mining business in the Pilbara, and advising Darwin-based IT firm CSG on a conditional takeover proposal valued at $340 million.
Its local clients included Minara Resources, Amadeus Energy, Bannerman Resources and Catalpa Resources.
Macquarie, jointly with UBS, was also engaged by insolvency firm KordaMentha to advise on the sale of Griffin Group’s major assets, resulting in two of the most talked-about deals of the year.
Indian company Lanco Infratech paid $750 million for Griffin’s coal mining business, while Japanese groups Kansai Electric Power and Sumitomo Corporation conditionally agreed to pay $1.2 billion for Griffin’s coal-fired power stations.
Ironically, issues flowing from the Lanco deal – specifically its controversial push to hike the selling price of coal to domestic customers – have delayed the completion of the power station sale.
Lanco’s actions, which earned the wrath of Premier Colin Barnett, have also cast doubt on plans by another Indian group, Perdaman Chemicals & Fertilisers, to build a giant urea plant at Collie, near the coal fields. That dispute is currently before the courts.
The two Griffin transactions were among eight WA-related deals worth $5.2 billion that UBS worked on last year.
UBS has continued to lift its market share, using its national and international connections to support the work done by its five-person team in Perth, led by Tim Day.
Its other WA transactions included advising Wesfarmers (jointly with Gresham) on the $296 million sale of its Premier Coal business to China’s Yancoal.
Current mandates include advising Sundance Resources on the $1.65 billion takeover proposal from China’s Hanlong Mining.
Perth broking and advisory firm Hartleys had a successful year, advising on 10 M&A transactions with a gross value of $2.6 billion.
Led by Grey Egerton-Warburton, Hartleys nine-person M&A team does not have a national or international network to bolster its deal flow, relying instead on its local expertise and relationships with Perth resources companies.
Its 2011 deals included three Atlas Iron transactions, which enabled Atlas to bolster its resources base and its all-important access to berth capacity at Port Hedland harbour.
Other clients included Africa-focused Gold One International, Jabiru Metals and Focus Minerals.
The market leaders in the M&A sector will have no chance to rest on their laurels, judging by the numerous moves afoot at competing firms.
Azure Capital, KPMG, PCF Capital, Merrill Lynch and GMP are among players to have bolstered their presence in Perth.
Just this week, Bedford Capital founder Greg Evans, along with two of his staff, started working at KPMG.
Mr Evans has joined KPMG as a partner and head of M&A, with the aim of broadening the firm’s reach into the public company market and capital raisings.
His move followed the recruitment last year from PwC of James Turnbull, who joined KPMG as a director with a focus on industrial M&A.
In addition, KPMG has recently promoted Matt Pedley as a director, to focus on mining M&A.
Gary Smith, who started this month as chairman of partners for the WA practice, said bolstering the M&A team was one of many initiatives being taken to expand KPMG’s business in WA.
Commenting on the M&A strategy, he said: “I want to expand the areas of the market that we work in.
“In the public market area, I would expect to see significant growth in our activity.”
Mr Evans brings wide experience to KPMG, including five years at Bedford and time at Argonaut before that.
During 2011, Bedford advised Reed Resources on a $40 million capital raising and acted for OTOC Limited on the reverse takeover of Emerson Stewart and an associated capital raising. His move helps to make up for the loss of Adrian Arundell, who left KPMG to join Azure Capital.
Azure managing director Geoff Rasmussen said Mr Arundell was one of three new directors introduced to the firm, along with Richie Baston and Clinton Wolf.
Mr Rasmussen said another highlight for Azure was the launch of its consulting arm, which is being led by former SAS officer James McMahon.
International investment bank Merrill Lynch has moved to maintain its presence in Perth following the departure of long-running local manager Neville Gardiner, who is preparing to start his own boutique advisory service.
Former Perth-based Clayton Utz lawyer David Wood has taken responsibility for its WA operation, including being present here for about one week each month.
Mr Wood is Merrill Lynch’s managing director for natural resources Australia, and has five advisory staff in Perth.
Another notable move was George Jones’ appointment as chairman of PCF Capital, which diversified last year from advisory work into institutional broking.
