Thomas weisel Case
Thomas Weisel Case
1.As a Montgomery Securities partner in mid 1997, would you argue for or against selling the firm to NationsBank? Why? Montgomery experienced great prosperity in the1990’s, its revenue leaping more than sevenfold, from $94 million in 1990 to $705 million in 1997. Most of its success came from investing in fast-growing companies. On June 30, 1997, NationsBank Corporation of Charlotte, N.C. announced that it was acquiring Montgomery for approximately $1.3 billion, believing that the combination would create one of the nations top full-service investment banks. The acquisition price was about 15 times the firm’s earnings and 13 times its book value. Before the sale of the firm to NationsBank, Weisel said, “We needed considerably more capital to realize our growth potential and we needed to expand to the debt arena to stay competitive and not lose our clients. I also saw an attractive opportunity to develop a solid private equity practice, but that, too, would take a lot of money.” Therefore, I argue in favor in selling the firm to NationsBank. It was the perfect moment to do it since they did not have enough capital in order to grow the firm and expand it. Also, Weisel was optimistic about future prospects. He though that the combination of our two companies will be a greet fit since his company was doing well but he only need more capital in order to be a bigger firm so Nationsbank would provide it for his firm. Weisel said, “The breadth of the NationsBank corporate client base with our investment banking, research, and advisory capabilities will create a formidable player in the investment banking area.” This quoted explain that with the help of both firm will be the perfect match in the investment banking area since it would have everything. In conclusion Thomas Weisel decision to let NationsBank acquire Montgomery Securities was somewhat right. The partnership turned sour after Weisel was being treated as co-head and not like a
1.As a Montgomery Securities partner in mid 1997, would you argue for or against selling the firm to NationsBank? Why? Montgomery experienced great prosperity in the1990’s, its revenue leaping more than sevenfold, from $94 million in 1990 to $705 million in 1997. Most of its success came from investing in fast-growing companies. On June 30, 1997, NationsBank Corporation of Charlotte, N.C. announced that it was acquiring Montgomery for approximately $1.3 billion, believing that the combination would create one of the nations top full-service investment banks. The acquisition price was about 15 times the firm’s earnings and 13 times its book value. Before the sale of the firm to NationsBank, Weisel said, “We needed considerably more capital to realize our growth potential and we needed to expand to the debt arena to stay competitive and not lose our clients. I also saw an attractive opportunity to develop a solid private equity practice, but that, too, would take a lot of money.” Therefore, I argue in favor in selling the firm to NationsBank. It was the perfect moment to do it since they did not have enough capital in order to grow the firm and expand it. Also, Weisel was optimistic about future prospects. He though that the combination of our two companies will be a greet fit since his company was doing well but he only need more capital in order to be a bigger firm so Nationsbank would provide it for his firm. Weisel said, “The breadth of the NationsBank corporate client base with our investment banking, research, and advisory capabilities will create a formidable player in the investment banking area.” This quoted explain that with the help of both firm will be the perfect match in the investment banking area since it would have everything. In conclusion Thomas Weisel decision to let NationsBank acquire Montgomery Securities was somewhat right. The partnership turned sour after Weisel was being treated as co-head and not like a