Geneva Cos. Led World Last Year in Initiating, Closing Mergers

The Geneva Cos., a Costa Mesa firm that handles mergers and acquisitions, initiated and closed more deals than anyone else in 1987, according to a ranking published Monday by an industry newsletter.

Geneva was credited with initiating 50 mergers and acquisitions last year, far surpassing London-based Henry Ansbacher with 36 deals and Wall Street stalwarts such as PaineWebber with 33, Drexel Burnham Lambert with 26 and Kidder Peabody with 21.

The ranking shows a “tremendous amount of activity in the middle market area” served by Geneva, said David R. Hoods, president of Geneva Marketing Services, a subsidiary. Geneva mostly handles mergers and acquisitions involving companies valued at $1 million to $50 million.

Its leadership last year “is solid evidence of the emergence of the middle market as America’s most active merger arena,” said Arthur D. Perrone Jr., president of Geneva Business Services, another subsidiary.

“Even the stock market crash of Oct. 19 has not slowed middle-market merger activity in 1988,” Perrone said.

Geneva’s chairman, Richard Rodnick, has predicted that companies involved in the middle merger market can expect a 10% increase in business this year. But Hoods said Geneva expects to initiate 70 to 75 deals this year, a potential 50% increase.

The company has 350 employees, a large computer database and regional offices in Chicago, Clearwater, Fla., and Teaneck, N.J.

In 1986, Geneva had ranked second to Ansbacher on the list of deals initiated, according to Corporate Financing Week, an industry newsletter published by Institutional Investor. But privately held Geneva shot ahead of the pack in 1987, according to the newsletter.

The ranking, determined by the number of “tombstone” advertisements published in newspapers to announce completed merger and acquisition transactions, marks the first time a West Coast firm--or any non-Wall Street firm besides Ansbacher--has headed the list.

In terms of total dollar volume generated by merger and acquisition deals and advisory services, neither Geneva nor Ansbacher rank in the top 10, said Jill Dutt, editor of Investment Dealers Digest, an industry periodical.

The dollar-volume leader last year was Goldman Sachs with $63.5 billion. Goldman initiated only seven deals but acted as an adviser in 127 others.

Geneva handles mergers and acquisitions of mostly private companies and does not disclose details of the transactions, Hoods said.

Geneva and Ansbacher may be small firms involved in smaller deals, Dutt said, but that doesn’t diminish their performance in the merger and acquisition arena.

“The two big bywords on Wall Street last year,” she said, “were ‘big deals’ and ‘big fees.’ What this shows is that while Geneva and Ansbacher were two companies that were not in the biggest deals, smart people can analyze a company and provide buyers with advice that makes sense.

“If they couldn’t do that, you wouldn’t see them leading in this kind of category,” she said.

The significance of the ranking was downplayed by Corporate Financing Week.

“All it means is that Geneva was the most active advertiser among those who initiated mergers and acquisitions,” said Steve Clark, a senior editor at the newsletter.

But Dutt, a former editor at the newsletter, disagreed.

“You can say that the list ranks only those deals that are advertised, but in this business, almost every deal is advertised,” she said.

The list does not include unadvertised or uncompleted deals or those involving defense-related activities. Nor does it take into account the size, complexity and profitability of the deals, according to the newsletter.

TOP FIRMS IN MERGERS, ACQUISITIONS

Merger and acquisition activity in 1987, ranked by number of deals advertised.

1. Geneva Cos. . . . 50 2. Henry Ansbacher . . . 36 3. PaineWebber . . . 33 4. Drexel Burnham Lambert . . . 26 5. Kidder Peabody . . . 21 6. (tie) Chase Investment Bank . . . 14

Merrill Lynch . . . 14 8. Prudential-Bache Capital Funding . . . 12 9. Morgan Guaranty Trust . . . 11 10. (tie) Donaldson, Lufkin & Jenrette . . . 10

Smith Barney, Harris Upham . . . 10 Source: Corporate Financing Week