Thomas weisel Case Dissertation

п»їThomas Weisel Case

1 . As a Montgomery Securities spouse in mid 1997, do you argue pertaining to or against selling the firm to NationsBank? How come?

Montgomery experienced superb prosperity in the1990's, it is revenue jumping more than sevenfold, from $94 million in 1990 to $705 million in 1997. Most of the success of the claims came from buying fast-growing companies.

On June 30, 1997, NationsBank Corporation of Charlotte now, N. C. announced that it absolutely was acquiring Montgomery for approximately $1. 3 billion, believing the combination could create one of many nations top full-service purchase banks. The acquisition selling price was about 12-15 times the firm's revenue and 13 times the book value.

Before the sale for the organization to NationsBank, Weisel stated, " We needed somewhat more capital to realize our progress potential and we needed to expand to the debts arena to stay competitive but not lose companies. I also saw a nice-looking opportunity to produce a solid private equity practice, but that, too, would take a lot of money. ” Therefore , We argue for in selling the firm to NationsBank. It had been the perfect instant to do it since they did not have enough capital to be able to grow the firm and expand it.

Also, Weisel was positive about long term prospects. This individual though that the combination of our two companies will be a welcome fit since his organization was succeeding but this individual only need even more capital in order to be a bigger firm so Nationsbank would provide this for his firm. Weisel said, " The width of the NationsBank corporate clientele with our investment banking, exploration, and advisory capabilities will make a solid player in the investment banking area. ” This offered explain that with the help of equally firm is definitely the perfect match inside the investment financial area mainly because it would have every thing.

In summary Thomas Weisel decision to let NationsBank get Montgomery Investments was to some extent right. The partnership switched sour after Weisel was being treated while co-head rather than like a employer. Even with all of these setbacks having been able to gain enough encounter to start an additional successful firm.

2 . How come do you think the NationsBank-Montgomery Investments partnership imploded? What lessons can be sucked from the difficulties confronted by the partnership about post-merger integration?

One of the reasons that NationsBank-Montgomery Investments partnerships imploded were Montgomery people were allowed to be in charge experienced co-heads. By summer of 1998, the partnership between Montgomery's investment bankers and the parent or guardian company's got soured. NationsBankers irked Montgomery professionals simply by tagging along on revenue calls and trying, unsuccessfully, to trim 5% off the firm's $400 million annual-pay kitty.

They did some motions that contradicted the purchase agreement that specified that Montgomery might retain autonomy and control over its businesses. It was one of many effects that these partnerships imploded.

Thomas Weisel was very disappointed in the sale for the company because there had been parameters that were violated in the beginning. The most difficult part about all this was your unhappiness of numerous of the previous Montgomery individuals that had implemented the led to Nationsbank. He said that " If I experienced the chance to do it all once again I didn't do the combination. ” Having been completely regretful.

Bank had dropped much of the appeal simply by essentially pushing outstanding artists to cover fully developed and seemingly less fascinating industries. Skilled bankers started to be bored doing the same types of bargains over and over. With time, they started to see themselves as processors rather that as purchase bankers.

The teachings that Jones Weisel discovered from this combination were that he found that partnerships are certainly not always your best option, because the other person does not always fulfill all their initial agreement. For example , Hugh McColl, NationsBank CEO, treated Montgomery people that were intended in charge as co-heads. This actions simply by McColl led Weisel to rethink the partnership and in 1999...



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