BankBoston Corp. has completed its $800 million acquisition of San Francisco securities firm Robertson Stephens from BankAmerica Corp., bringing equity underwriting capability to the $70.5 billion-asset bank holding company for the first time.
The firm will merge with BankBoston's investment banking subsidiary, BancBoston Securities Inc., which emphasizes high-yield debt products. Afterward, the subsidiary will use the global brand BancBoston Robertson Stephens Inc.
"We want to build an integrated investment bank," said BankBoston vice chairman Paul Hogan. "We want to form specific industry planning groups, with some on the investment banking side and some on the commercial side coming up with a common plan to serve an industry or customer."
Both companies had mergers and acquisitions advisory groups, though BankBoston's was much smaller. Robertson Stephens was ranked 13th among M&A advisers so far this year, advising on 32 deals valued at $46.8 million, according to Securities Data Co.
BankBoston plans to fold its M&A group into Robertson Stephens'. David Hetz, from the Robertson Stephens side, is to head the expanded group. Peter Lombard, who headed BankBoston's M&A group, will be his associate director.
"And I think this is one area we could build out even after the merger," Mr. Hogan said.
Robertson Stephens has 55 equity researchers covering more than 600 companies. Seven senior researchers were hired after BankBoston's purchase agreement was announced in May. BankBoston has four high-yield researchers covering about 150 companies.
The bank has a total of 42 in its high-yield team in Boston. Now the team will report to Michael McCaffrey, president and chief executive of Robertson Stephens, who will lead the new bank subsidiary. He reports to Mr. Hogan.
So far this year, Robertson Stephens was ranked 13th among equity underwriters, running the books on 24 domestic equity issues valued at $1.6 billion, according to Securities Data.
Though the initial public offering market has languished for much of this year, bank executives foresee an opportunity to advise and underwrite offerings for the private equity community.
"There's an enormous amount of new company formation going on in the middle market," Mr. McCaffrey said. "The cash flowing into venture capital and leveraged buyout funds and the mega-trend of cash flow into retirement funds will create opportunities."
Both BankBoston and Robertson Stephens have their New York sales and trading operations in the IBM building. The firm's combined New York operation will focus on selling to large institutional investors based there.
The merged company will maintain its debt market making group in Boston, its equity market making group in San Francisco, and its European equity and debt groups in London.
BancBoston Robertson Stephens will specialize in growth industries, including technology, health care, and real estate, all mainstays for the bank and the firm.
It will also seek to take advantage of opportunities overseas, primarily in Europe. Mr. Hogan said many of the Latin American equity deals involve large privatizations, not the kind of growth companies that BankBoston and Robertson Stephens have traditionally emphasized.