Prudential Volpe Technology Group

ABOUT THIS COMPANY:

Once one of the few private investment banks on the West Coast, Volpe Brown Whelan & Co. was acquired by Prudential Securities, a unit of Prudential Insurance, in December of 1999. The firm was renamed Prudential Volpe Technology Group. Volpe once emphasized their status as an independent, proclaiming "No Dinosaurs!" in the company logo, the crossed-out head of a toothy T-Rex. However, Volpe needed the backing of a dinosaur like Prudential in order to compete for larger IPOs.

Volpe Brown Whelan, founded in 1987, concentrates on ensuring the survival of the fittest technological and healthcare companies. Volpe professionals are focused solely on the technology and healthcare industries, providing investment banking services such as underwriting and M&A advisory to usually small companies in these industries.

The next step in Volpe Brown Whelan's evolution came in March 1997, when Credit Suisse First Boston, a wholly owned subsidiary of the Zurich-based Credit Suisse Group, acquired a 25 percent stake in Volpe (At that time, Volpe Brown Whelan, formerly Volpe Welty, gained its current moniker.) The new alliance with Credit Suisse permitted Volpe to enhance its international services and created a specialist merchant banking fund. The Prudential acquisition included buying out Credit Suisse.

Volpe has earned its reputation as a player in the technology field. The firm participated in several high-profile IPOs, including lead-managing the July 1999 offering of BE, Inc. and the May 1999 offering of Comps.com. Additionally, Volpe co-managed several deals, including About.com, Inc. (March 1999) and Hoover's, Inc. (July 1999).

Hard times

In late 1998, Volpe was hurt by weakening market conditions, and found itself in a position familiar to many of its I-banking competitors - the position of having to lay off bankers. The firm cut more than 15 percent of its employees (30 positions in all), including two managing directors, just before the end of the year.

Volpe faced additional staffing problems after the Prudential purchase. In January 2000, about 10% of the company's 200 employees left the firm, including 5 out of 14 analysts. Observers speculated that the defectors were unhappy with the prospect of working for a large firms such as Prudential, and several joined smaller venture capital firms.

As a result, Prudential restructured the firm's management. Former Volpe Brown Whelan CEO Thomas Volpe and partner Robert Whelan had been in charge of the day-to-day operations of the firm. James Feuille, Prudential's head of investment banking operations, was charged with the day-to-day management, while Volpe and Whelan were moved to long-term strategy.