The other Morgan
Morgan Joseph zeroes in on offering financial advisory and
capital-raising services for its clients domestically and
internationally. Unlike some of its bigger counterparts, the
firm has actually continued to grow, adding new divisions even into
2008, a pretty troubled year for most of the financial industry,
which is still reeling from the collapse of credit and mortgage
markets.
Its investment-banking unit, which employs about 70 investment
bankers, uses its equity sales and trading divisions to help its
client trade a variety of securities. The firm's advisory
services group gives transaction advice to corporate clients and
institutional investors, its subdivisions include M&A,
restructuring and advisory for financial and special purpose
acquisition companies (SPACs).
Morgan Joseph's capital markets group provides services to those
who issue debt, equity and convertible securities. Capital
markets' subdivisions, which include equity capital markets, high
yield capital markets, private placements and SPAC underwriting,
are involved in a variety of different transactions. Within
its equity capital markets unit, the firm manages initial public
offerings while the high-yield capital markets unit takes care of
managing secured and subordinated notes. The private
placement subdivision, meanwhile, takes care of placing preferred
stock, debt and warrants. Finally, Morgan Joseph's SPAC
underwriting subdivision is somewhat of its crown jewel, it had
more than $2.3 billion in 20 transactions from underwriting SPACs
(overall, the industry has raised $14.8 billion via SPACs from 2004
to 2008).
Big deals
The firm stays busy advising on a number of transactions. It
advised Kohlberg & Company on its $270 million acquisition of
PPG Industries' auto glass and service unit in September 2008 and
Angelica Corporation on its $300-million sale to Lehman Brothers
Merchant Banking in August 2008. It also recently provided a
fairness opinion to Icahn Enterprises on its $863 million purchase
of the majority of Federal-Mogul Corporation.
Structure and restructure
Morgan Joseph formed several new units in 2008, first launching
its analytics and trading group in June 2008. At the outset,
the firm planned to trade structured products like residential
mortgage-backed securities (RMBS), commercial mortgage-backed
securities (CMBS), structured credit securities (CLOS) and
asset-backed securities (ABS). In September 2008, Morgan
Joseph announced that it would be adding a division focused on
restructuring transactions to its corporate finance department,
which is now simply called the Structured Products Team. The
restructuring unit, which gives advice to distressed firms, is
headed up by James Decker and comprises six bankers.