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Dotcom-era banker's small firm is about to rake in a mountain of advisory fees

Investment banker Frank Quattrone waits to putt on the sixth green during the first round of the Pebble Beach Pro-Am golf tournament in Pebble Beach, California February 11, 2016. REUTERS/Michael Fiala

The small investment banking firm founded by legendary tech banker Frank Quattrone scored its biggest deal to date.

Quattrone's Qatalyst Partners is the lead advisor to LinkedIn on a proposed $26.2 billion sale to Microsoft.

Quattrone stepped down as CEO of Qatalyst in January, handing the reins over to George Boutros. He didn’t retire though. Instead, he's now the firm’s executive chairman, advising clients and driving strategy, USA Today reported earlier this year.

Quattrone became famous in Silcon Valley after building the technology investment banking businesses at Morgan Stanley, Deutsche Bank, and later Credit Suisse. During his career, he's worked on hundreds of M&A deals and brought numberous tech companies public, including Amazon and Cisco. He’s also built an incredible rolodex of some of the Valley’s biggest technology executives.

He faced a bit of legal trouble after the dot-com bubble burst. In 2003, he was charged with blocking an investigation of how Credit Suisse was allocating shares during initial public offering processes. He was convicted and banned for the securities industry. However, he was exonerated on appeal in 2006, the ban was lifted in 2007, and all charges were dropped.

Quattrone went on to launch Qatalyst in March 2008 just before the onset of the financial crisis. Since then, he's worked on high-profile deals such as Google's $12.5 billion acquistion of Motorola Mobility, Yahoo!'s acquistion of Tumblr for $1.1 billion, and Cisco's $1.4 billion acquisition of Jasper, just to name a few.

The LinkedIn/Microsoft deal would be Qatalyst's biggest to date, and it could result in a nice pay day for the boutique firm.

Jeffrey Nassof, a director at M&A advisory firm Freeman & Co., estimates that the LinkedIn sell-side advisory fees up for grabs could come in between $40 and $45 million.

In addition to Qatalyst, the other boutique firm advising LinkedIn is Allen & Co. It’s not immediately clear how those potential fees would be divvied up amongst the firms.

Meanwhile, Morgan Stanley is acting as exclusive advisor to Microsoft. Those fees are estimated to come in at $10 to $20 million, according to Freeman & Co.

There could also be fees from debt financing up for grabs. Microsoft has also said that they’re planning to finance the bid “primarily through the issuance of new indebtedness.” There’s no information on the size and structure of that debt package at this time. Freeman & Co. estimates that if they conservatively end up raising $15 billion in debt, they could pay fees in the $40 to $60 million range.


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Julia La Roche is a finance reporter at Yahoo Finance.

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