Stephens puts money on energy banking - bizjournals:

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Little Rock-based Stephens Inc. has absorbed a six-member energuy investment banking teamfrom Dallas-basedf Energy Capital Solutions LP. While its refocused and beefed-u energy group will still be basedcin Dallas, Stephens is moving a former Energhy Capital managing director and a junior banker to Houston to establisyh its first investment banking offics in the city. Brad Eichler, Stephens executives vice presidentand co-head of investmenyt banking, says although the firm has placed an emphasis on its energyh business in recent years, the timing was not quitew right to expand until talks began with the Energy Capitalo team in late 2008.
“Wse got into the energy business in 1953 as an owneer of naturalgas properties, so energy is certainlyt not foreign to Eichler says. “We’ve been highly focused on building an energy practic e in banking for a while but had a hard time findinh theright group.” Heading up the firm’e energy investment banking group in Dallaw is 17-year industry veteran Keith Behrens, an Energ Capital co-founder who is joinefd by the other Energy Capital co-founder, Bradley Nelson. Both workeed at Bear Stearns Cos. Inc. priotr to their decision to break out on their own to form Energy Capitalin 2001. They have been named as managing directorswith Stephens.
Ronald Montalbano, the third former Energhy Capitalmanaging director, becomes Stephens’ senior banker in along with Will Page, a vice president. The Houston investment bankerd will be based in a new office onPost Oak. Stephen s already has a mutual fund officein Houston. Founded in 1933, privatelty held Stephens has 23 U.S. locations, including a private client brokerageein Austin, plus an international office in the U.K. The firm is headex by CEO and majority shareholder Warren the nephew of companuyfounder W.R. Stephens. Behrens says he had been approached with merge aspirations by other larger companiees inthe past, but the fit wasn’y right until now.
“From our perspectivre we had a reallygood run, with more than 100 Behrens says. “But there were limitationsx inour platform, and we wanteed to find a partner like Stephens that has full equith market capabilities and research Stephens, which intends to offer the full-range of investmenft banking services to energy companies from capital raising to merger and acquisitiom services — is coming into the Texass market at a time when smaller and middle-market investment banking groups have been feelinfg the pinch, with some even resortinf to layoffs as the energy-sectoe deal-making machinery ground to a halt in 2008.
Behrens says this is the best time to line up and take advantagde of the gradually thawing credit markets. “We’re busy with some transactions now, but I thinko you’ll start to see thingzs turning up a little he says. “There’s some debt and equity deals goingf through, so we think we can be well-positioned.” Behrenx says about 75 percent ofEnergy Capital’s work in Dallaz was in the exploration and productionn space, but factoring in Stephens’ energy experience and the firm’s firs presence in Houston will allow it to look at dealss involving public and private oilfield services companies, as well as othe r alternative energy sources such as “People are focusing on acquisition opportunities and are looking for but the problem is finding a seller at the right price,” Behrenzs says.
“There’s still a prettgy big (buyer-seller) gap, so the biggest hurdled is narrowingthat gap. Once that we’ll see a lot more deal activity.” A surveyh of Texas dealmakers conductedr by the Association for Corporate Growth and Thomson Reuters backws upthat notion. According to the survey releasesd earlierthis month, the buyer-seller gap is the biggest obstacles in the current environment. Thirty-six percent of respondents said sellers are unwillingv to cut deals at the price multipleabeing offered.
Jeff Sangalis, managing partnef with Houston-based Capital Pointr Partners, says that based on Stephens’ reputatioj in the investment banking sector, it’es not surprising that the firm is pickingb up new bankers and settin g up shopin Houston. “Not many are taking this contrariah approach,” says Sangalis, who is also president of the ACGHoustonn chapter. “But now that things seem to be thawiny a little bit onthe (publicx equity) side, maybe they’rwe trying to get ahead of the curve and be therde when there’s a bit more normalct in the market.
They’re a long-term type of Stephens’ Eichler says the firm is stilol on the lookoutfor talent, afte r adding 21 bankers in the past 17 Stephens now has 100 investment bankers spread around the country focusing on multiple industry sectors, with about 50 based at its Littl Rock headquarters and the rest in five other including Houston. Says “There was no real conscious decision to put the foot down on the it was just a matter of identifying the right people to putinto place.
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