(By Bob Blandeburgo) In a signal of confidence for the future of mergers-and-acquisitions (M&A), Lazard Ltd. (NYSE: LAZ) appointed Kenneth Jacobs as its chairman and chief executive officer following the unexpected death of famed dealmaker Bruce Wasserstein.
Jacobs, a 21-year company veteran, was most recently CEO of Lazard
North America and has a history of leading M&A advisory teams.
"Jacobs is clearly qualified for the position because he has run the
North American operations of the company," Dick Bove, vice president
and equity research analyst at Rochdale Securities LLC told Bloomberg Television. "It should be positive for Lazard."
The worst financial crisis since the 1930s has resulted in a
dramatic slowdown for the M&A market in 2009, taking huge chunks of
revenue from the income statements of companies that depend on deals.
For Lazard, the downturn was evident: Third quarter revenue at its
M&A and strategic advisory business – once its No. 1 source of
sales – fell to $124.6 million from $230.8 million in the same period
last year, a drop of 46%. That drop was easily offset by growth in its
restructuring business, where revenue rose to $119.1 million from $23.9
million a year ago, a gain of 397%.
When the Lazard's board set out to find a replacement for
Wasserstein, it could have appointed a new chief executive to take the
company in a different direction – such as shifting more resources to
its asset management business.
Instead, the company chose Jacobs, who has led Lazard teams on a
number of high-profile deals. Most recently, he advised GlaxoSmithKline
PLC (NYSE ADR: GSK) on its purchase of Stiefel Laboratories Inc. and the Rohm Family Trusts, which played a part in the sale of Rohm and Haas to The Dow Chemical Co. (NYSE: DOW).
Lazard, which got 62% of its third-quarter revenue from its
financial advisory business, is optimistic on the long-term future of
M&A.
"The economy is beginning to stabilize and CEO confidence is
returning," then-interim CEO Steven J. Golub said last month.
