“Huge Wave” of M&As to Hit Silicon Valley and Boutique Banks Notice

Investment banks are scrambling to open branches and make their presence known in the Silicon Valley area because they are expecting a "huge wave" of mergers and acquisitions and financing deals in tech and media over the next two years, Kevin Covert, president and co-founder of boutique I-bank Covert and Co., told VentureBeat today.

In fact, Covert launched his own new bank today after leaving investment bank Montgomery & Co., because he says the opportunities right now for investors looking to capitalize on a white-hot startup climate on the West Coast were just too great to pass up.

"[I think] the media a tech industry will be leading nation out of recession from the financial/housing crisis, because acquirers are now streamlined, flush with cash, and highly competitive," said Covert.

As part of that change, the venture capital industry has gone through "major" changes, with a whole new new investing climate emerging — all of which is now has I-banks hungrily eyeing thousands of tech companies with great businesses still facing tight investing and sluggish IPO market.

Covert was Montgomery's primary architect of its investment banking business and helped establish the core M&A and private placement practices of the bank over the span of 10 years. He also founded the bank's software and media groups.

While there, he oversaw the mergers and acquisitions of Musicmatch/Yahoo, Club Penguin/Disney, DailyCandy/Comcast, MySpace/NewsCorp, PilotSoftware/SAP, Grouper/Sony, ifilm/Viacom, Rent.com/eBay, Ribbit/BT, DWL/IBM and Element5/DigitalRiver.

In addition, he captained the bank's financing of Meebo, Realtime Worlds, WildTangent, Reactrix, Move Networks, KickApps, LegalZoom, Specific Media and VantageMedia.

While making those deals, Covert said he saw that many smaller I-banks are now beginning to realize the enormous opportunities they have to get in on the ground floor of some of the world's hottest pre-IPO tech companies.

"Buyer and seller valuations are more aligned than past five years," said Covert, "and there are no dominant tech investment banks to serve this upcoming wave of deals. Large banks [like] Goldman Sachs, Credit Suisse, Allen & Co. serve public companies, but it is the entrepreneurs and investors that desperately need quality M&A and financing services."

"The old-school investment banking world is changing," he added.

Companies: BT, Club Penguin/Disney, Comcast, covert and co, Dailycandy, DigitalRiver, DWL, eBay, Element5, Grouper, IBM, ifilm, Montgomery & Co., Musicmatch/Yahoo, MySpace, NewsCorp, PilotSoftware, Rent.com, Ribbit, SAP, Sony, Viacom

People: kevin covert

By DAVID BARBOZA and CLAIRE CAIN MILLER 21 Mar, 2011

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Source: http://feeds.nytimes.com/click.phdo?i=a113b64fc5fb64b7e37013693d3c0729
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