DelMorgan & Co. Deal Process:  How the Firm Achieves Success

While M&A processes often follow a traditional path, DelMorgan & Co., a middle-market bank based in Los Angeles, California, has opted for a different approach rooted in an elevated standard to produce the highest quality results for its clients. 

Understanding Each Client’s Goals

For the bankers at DelMorgan & Co., the focus is not on how many transactions they close but on how they can close and optimize the right transactions for clients.  DelMorgan’s advisory approach emphasizes long-term relationships, client priorities and customized guidance across a wide range of sale processes, capital raises, acquisition strategies and other important corporate finance decisions.

DelMorgan & Co.’s process beings with early alignment.  The firm invests substantial time prior to going to market to understand the client’s priorities, its unique position in the market, any potential challenges, and what the strategic, financial or other goals may be in the transaction.  DelMorgan believes that “success” may mean different things for different clients and that most investment banks operate without a deep understanding of what that may be.  DelMorgan measures success not only based on deal outcomes, but also by serving as a trusted advisor who helps the client understand the market and achieve the client’s unique goals. 

Preparation Before Going to Market 

Strong preparation is not only about producing quality marketing materials; it is about helping the client understand how the market may view its business, what questions may arise and how best to position the opportunity.  DelMorgan’s transaction experience across a wide range of company sizes, industries and geographies gives the firm a unique perspective on how different buyers, investors and strategic partners are likely to evaluate an opportunity.  One example of this is DelMorgan’s strong recommendation to most clients that they complete a Quality of Earnings (QoE) analysis before going to market for an M&A sale.  While most investment banks will skip this step, to try to get to market quickly and rely on the buyer’s QoE, DelMorgan is willing to invest the time upfront.  This allows the client to better understand its true financial position and for DelMorgan to approach the market with a highly defensible data set that buyers can validate. 

Comprehensive Approach to Buyer Engagement

DelMorgan & Co. takes a direct and comprehensive approach to counterparty engagement and negotiation.  While DelMorgan has deep experience and a high degree of specialization across a broad range of industries, it typically avoids an approach to buyer engagement that only focuses on the obvious “usual suspects” in any industry.  The firm maintains strong relationships with the most notable buyers, both financial and strategic, in any key industry, but it does not limit its outreach to just those groups.  Instead, DelMorgan is creative in its approach to outreach and identifies a wide range of parties that might have a strategic interest who would commonly be overlooked.  In addition, DelMorgan focuses not only on a domestic buyer audience but an international one.  The combination of these factors often leads to processes where DelMorgan will speak to many times more potential buyers than its competitors do in a process.  Other buyers often avoid this for two reasons that are not in the best interest of the clients:  (1) it represents a significant time commitment and (2) they prefer to prioritize repeat buyers (often with close relationships, and often at the client’s expense).  DelMorgan, on the other hand, puts clients’ (and not buyers’) interests first and is willing to take the extra steps necessary to optimize client outcomes, regardless of the substantial effort required. 

Senior-Led Negotiations:  No Substitute for Experience 

Throughout its marketing processes, DelMorgan’s senior leadership not only helps prepare clients for market and conducts buyer outreach, it also leads the negotiations with buyers.  M&A negotiations can be extremely complex, and no two situations are exactly the same.  This level of complexity and the high-stakes nature of every M&A deal require senior bankers who have previously seen all the possible permutations of deal issues and who know how to effectively manage the multiple parties and personalities involved.  While other banks may dedicate more junior resources at this stage, DelMorgan knows that there is no substitute for years of experience.

Success from the Client’s Perspective

Success in an investment banking process is not always defined by a single metric.  Valuations matter, but so do cultural fit, strategic alignment, what a client learns about its business and the level of dedication its advisor can provide.  DelMorgan seeks to maximize success by dedicating key resources to every stage of the process and by leaving no opportunity unaddressed. 

This is enforced by and reflective of the track record of success of DelMorgan’s professionals, which has led Axial, a platform that tracks M&A advisory activity in the North American lower middle market, to rank DelMorgan & Co. #1 Investment Bank in Los Angeles and #2 in California.