Investment banks set sights on smaller M&A deals: WSJ

|About: Bank of America Corporation (BAC)|By:, SA News Editor

As the M&A boom slows, big investment banks are setting their sights on smaller deals that they wouldn't have even noticed a few years ago, the Wall Street Journal reports.

While JPMorgan Chase (JPM -0.1%) worked on the $74B deal for Celgene and the $62B sale of Shire Plc, it also wooed Cianna Medical to represent the medical tech company with annual sales of $40M in its eventual sale to Merit Medical Systems for $200M.

Traditionally, deals in between $500M and a few billion dollars are dominated by regional firms such as Piper Jaffray (PJC -1%), and Virginia-based Harris Williams.

Meanwhile, some bigger banks, including JPMorgan, have formed groups to focus on regional deals.

A big reason for the shift is that there are only so many megadeals--last year, there were 135 deals valued at over $2B in the U.S., while there were 2,200 under that amount, according to FactSet.

Banks are also looking at private-equity firms, which have $1T available to invest; Goldman created a 30-banker team to work on private-equity deals.

Related tickers: C, CS, BAC, MS, WFC.

ETFs: XLF, FAS, FAZ, VFH, UYG, FNCL

Subscribe for full text news in your inbox