It is not out of the ordinary to see Boenning & Scattergood Inc. advise on a Pennsylvania bank M&A deal, but the investment bank does not typically land $1 billion transactions.
West Conshohocken, Pa.-based Boenning is serving as the buy-side adviser on Wilmington, Del.-based WSFS Financial Corp.'s $1.5 billion pending acquisition of Philadelphia-based Beneficial Bancorp Inc. while Sandler O'Neill & Partners LP is the sell-side adviser. Both investment banks have been active in Pennsylvania bank M&A deals.
Relationships cultivated over time can lead to bigger deals for investment banks, and Boenning does have a history with WSFS. On the equity research side of the business, the company has followed WSFS for years, launching coverage in 2009. The investment bank advised the company on its $94.1 million deal for Alliance Bancorp Inc. of PA in 2015 and landed co-manager roles on senior debt deals in 2012 and 2016. For Boenning, the WSFS and Beneficial role marks the first $1 billion-plus transaction in which the investment bank earned league table credit on a deal announced since at least 2000, according to S&P Global Market Intelligence data.
Boenning normally advises on much smaller deals. Since 2015, all but three of the investment bank's 35 U.S. depository deals had disclosed values below $100 million. Since 2015, Boenning has advised on nine such transactions in Pennsylvania, and only Sandler O'Neill has worked on more in the state with 13, according to S&P Global Market Intelligence data. Throughout the U.S., Sandler O'Neill has been active on the biggest deals in the space and has now landed spots on four of the six bank deals reaching $1 billion announced in 2018.
Boenning also advised National Penn Bancshares Inc. on its 2010 sale of Christiana Bank & Trust Co. to WSFS in a $34.5 million transaction that yielded the investment bank a $285,000 fee. Boenning's engagement on the WSFS and Beneficial deal should prove far more lucrative because payments to investment banks are often tied to the size of the deal.
The average buy-side payment on depository deals with a value between $1 billion and $2 billion is around 0.5% of the deal value, based on a review of eight transactions that were announced since 2010 and disclosed financial advisory fees. If that fee schedule were followed on the WSFS and Beneficial deal, Boenning could land a fee of about $7.5 million.
On the sell side, the average payment on depository deals with a value between $1 billion and $2 billion is around 0.8% of the deal value, based on a review of 11 transactions that were announced since 2010 and disclosed financial advisory fees. If that fee schedule were followed on the WSFS and Beneficial deal, Sandler O'Neill could land a fee around $12.0 million.
But fees vary from deal to deal. Sandler O'Neill earned a fee of $8.8 million for serving as financial adviser to National Penn on its sale to BB&T Corp., which equaled 0.55% of the $1.59 billion closing price.
Whatever the fees are on the WSFS and Beneficial deal, the financial advisers will proudly add the transaction to their pitchbook marketing materials. And Boenning's participation in a larger transaction underscores that more and more i-banks are seeking to land spots in the increasingly crowded arena for depository financial advisory engagements on $1 billion-plus transactions.