Wednesday, November 22, 2006

RBC to Acquire Daniels & Associates

Financial Post, Duncan Mavin, 22 November 2006

RBC Capital Markets yesterday beefed up its strength in the communications, media and entertainment industries in the United States in anticipation of a wave of activity set to sweep through the sector.

"There's going to be a tremendous amount of activity in this sector," said Peter de Vos, RBC Capital Markets U.S. chief.

The investment banking division of Canada's largest bank will acquire Daniels & Associates, LP, a Denver, Colorado-based mergers and acquisitions advisor that specializes in the cable, telecom and broadcast industries.

"We feel that it's going to be an incredibly active area and one that's going to require a lot of capital," said Mr. de Vos.

The impact of the Internet on TV and print advertising sales, as well as new technologies in video, data and audio, are creating opportunities for growth and consolidation.

For instance, last week radio and television operator Clear Channel Communications Inc. was sold to a private equity group in a deal worth US$26.7-billion. On the same day, investors led by Ripplewood Holdings bought Reader's Digest Association Inc. for about US$2.4-billion.

RBC said Daniels has completed more M&A transactions in the CME sector than than any other investment bank in the past six years. The firm has about 30 professionals dedicated to the communications, media and entertainment industries, a significant increase from RBC's current headcount of eight staff covering the sector.

The joint operations will be renamed RBC Daniels and current Daniels head Brian Deevy will remain as chief executive.

"We are very excited about joining forces with RBC Capital Markets," said Mr. Deevy. "This transaction will allow us to provide a much broader range of services to our clients."

RBC's Mr. de Vos said the business of the new RBC Daniels unit will be predominantly in the U.S. although it will also provide advice to RBC Capital Markets units in Canada and in other international markets.

RBC did not disclosed the financial details of the transaction, which is the latest in a series of U.S. acquisitions for the bank.

In October, RBC Capital Markets agreed to buy the broker-dealer business of New York-based Carlin Financial Group. The bank's RBC Centura retail banking business has also recently agreed to buy Atlanta-based Flag Financial Corp. as well as 39 branches in Alabama from AmSouth Bancorporation.