Bankers Trust New York Corp. made its first big mark as a mergers-and- acquisition adviser on Monday with the announcement of a $1.6 billion merger between two leading mutual fund companies.
BT Wolfensohn, a merger boutique created by the money center's Aug. 1 acquisition of James D. Wolfensohn & Co., counseled Invesco PLC on its deal for Aim Management Group.
The combined mutual fund company - to be called Amvesco PLC - becomes the 13th-largest in the United States, and a global powerhouse with $150 billion under management.
The deal, billed as a merger of equals, is one of the largest ever in the mutual fund arena, just behind Mellon Bank Corp.'s 1994 purchase of Dreyfus Corp. for $1.8 billion. The merger is expected to close in February.
For Bankers Trust, the deal signals that its $200 million investment in Wolfensohn is starting to pay off.
"This is a marquee deal for them," said a rival matchmaker. "We hadn't really seen BT or Wolfensohn in the market before or after the acquisition."
It is only the second deal BT Wolfensohn has sealed since its acquisition, and by far the largest. The previous one - advising photo equipment manufacturer Vivitar Corp. on its acquisition by Plaza Create Co. - carried a price tag of $36 million, according to Securities Data Co.
James D. Wolfensohn & Co. ranked seventh among merger advisers worldwide last year; Bankers Trust ranked 53d.
One bank analyst said Bankers Trust is making solid progress now that it has shifted its focus from the derivatives and trading businesses that have proved so troublesome in recent years.
"From Bankers Trust's point of view, it's a sign that they're back," said Raphael Soifer of Brown Brothers Harriman & Co. "BT Wolfensohn is open for business."
M&A advisers typically command fees of 5% to 7% of the transaction, meaning that BT Wolfensohn and Aim's adviser, Merrill Lynch & Co., each stand to rake in $75 million to $105 million for their roles in the transaction.
The merger of the two large fund companies has been closely watched since details of their talks began to surface last month. The transaction helps both parties expand in areas that are considered vital for survival in the rapidly consolidating mutual fund industry.
Invesco, which is based in London and operates worldwide, is known for managing assets for institutional clients with a conservative bent. Aim, based in Houston, has a stable of high-octane stock funds but only a fledgling presence in the overseas markets that are expected to fuel future growth for fund companies.
"Global management and distribution: That is the driving force of this transaction," said Neil Bathon, president of Financial Research Corp., Chicago.
Under the merger, Invesco's chairman, Charles W. Brady, 61, will hold that title with Amvesco. Charles T. Bauer, the 77-year-old co-founder and chairman of Aim, will become vice chairman. Robert Graham, 49, an Aim co- founder and chief operating officer, will oversee the combined company's North American retail businesses.
Wolfensohn and Merrill Lynch "officially" brought the parties to the table in July, according to Mr. Bauer, and the deal was signed last weekend.
Invesco, a Wolfensohn client for 10 years, is considered a big catch for Bankers Trust, given the fund company's proven appetite for acquisitions and the fund industry's growing financing needs.
