'Boutique' financial advisors vs. full-service investment banks: An analysis of advisor choice and deal outcomes in mergers and acquisitions

摘要

OBJECTIVES OF THE STUDY:In this thesis, I study the motives and impact of hiring boutique advisors in mergers and acquisitions (M&A). Specifically, this paper investigates a merging firm's choice between boutique and full-service advisors and the impact of advisor choice on deal outcomes regarding deal premium, deal duration and deal completion.DATA AND METHODOLOGY:My sample consists of 906 M&A transactions. The sample is collected from the Securities Data Corporations (SDC) database in Thomson One Banker. The sample contains completed and withdrawn transactions from the international merger database from 1987 to 2013. Both the acquirer and target firm are required to be publicly traded firms from the EU-19 countries, Norway, and Switzerland. Advisor choice is analyzed with multivariate logistic regressions. Deal premiums are analyzed with OLS regressions and a two-step procedure. Deal duration is analyzed with OLS regressions and deal completion is analyzed with multivariate probit regressions.FINDINGS OF THE STUDY:The findings suggest that deal size is an important factor in determining how merging firms select financial advisors. Boutique advisors are less likely to be chosen by either acquirers or targets as deal size increases. Additionally, some findings suggest that boutique advisors are hired when merging firms face complex transactions but these findings are weak. With regard to whether boutiques can improve deal outcomes, the findings are mixed.