Allegiance Capital 2009 Performance
ALLEGIANCE CAPITAL COMPLETES TRANSACTIONS TOTALING MORE THAN $500 MILLION IN 2009
Firm’s Five-Year CAGR Exceeds 50%
Dallas – February 16, 2010 – Allegiance Capital, an international investment banking firm serving privately-held middle-market companies, closed transactions in 2009 totaling more than $500 million. The firm’s five-year compound annual growth rate (CAGR) exceeds 50%. Allegiance
Capital projects a 60% year-over-year revenue increase in 2010.
Cross-border transactions played an important role in the firm’s success during the tough economic climate of 2009. Allegiance Capital opened offices in Madrid and Shanghai to assist international investors seeking to establish or expand their presence in the U.S.
“Our entrepreneurial spirit separates us from most investment banks,” says Allegiance Capital Founder and Chairman David Mahmood. A successful entrepreneur many times over, Mahmood staffs his firm with investment bankers from a variety of industries who have successfully built and sold their own companies. “We’ve developed a culture characterized by drive and innovation. We also understand that a successful transaction involves more than agreement on price. There’s definitely an emotional aspect to selling what amounts to your life’s work, which is what many of our sell-side clients are experiencing.”
A veteran of bull and bear market cycles, Mahmood cites several reasons companies may want to
sell early in 2010 rather than wait for the economic recovery to mature:
- There are benefits of selling at the front-end of a market recovery when fewer companies are being marketed.
- Private equity groups are sitting on about $300 billion, nearly double the figure they were looking to invest a few years ago. With fewer good deals coming to market, there’s pent up demand for M&A activity.
- In the U.S. someone turns 60 every 11 seconds. With 30% of family-owned businesses estimated to change leadership due to retirement in the coming decade,you can expect a huge wave of companies for sale as the market rebounds, which can depress prices.
- The Obama administration is expected to raise capital gains taxes to 20% from the present 15% no later than 2011. Considering it takes six to nine months to complete a transaction, those good companies who come to market now will fit in that window and owners will get to keep more of the proceeds.
- With the weak dollar, this is a perfect time for Western European buyers to invest in the U.S. The exchange rate alone can deliver a 30-40% premium to the owner.
- Credit markets have improved and deals are getting financed in the low and midmarket.
About Allegiance Capital
Allegiance Capital Corporation is a full-service investment banking firm specializing in the middle market (companies with revenue from $20 million to $500 million). Through its global network in Globalscope, Allegiance Capital assists companies in every aspect of selling and financing a business, including debt restructuring, mezzanine financing, buy out management, strategic partnering, consulting and other related services. For more information, refer to the company website: www.allcapcorp.com.
Allegiance Capital Corporation