McGladrey Capital Markets leads negotiations as Alexandria Extrusion Company acquires M&M Metals

Alexandria Extrusion Company has acquired M&M Metals. Terms of the transaction were not disclosed.

McGladrey Capital Markets LLC initiated the transaction, led the negotiations and acted as exclusive financial advisor to M&M Metals.

"Alexandria Extrusion Company's acquisition of M&M Metals not only will significantly expand AEC's geographic presences into the Southwestern U.S., but it will also allow the combined company to provide customers with the highest level of complementary heat-sink engineering and machining expertise," said John Dorey, senior managing director, McGladrey Capital Markets.

A team of McGladrey Capital Markets professionals contributed to the successful close of this transaction. Dorey, Michael Sims, vice president, and Richard Rhyu, associate vice president, led the deal team.

McGladrey Capital Markets Promotes Two Senior-Level Professionals

McGladrey Capital Markets LLC, a global middle-market investment bank, has promoted two senior-level professionals to the position of director. Bradley Schreiber and Sean Walker were both previously senior vice presidents in the firm’s Costa Mesa, Calif. headquarters.

Schreiber oversees the firm’s Recreation & Leisure Investment Banking Group. Walker leads the Healthcare Investment Banking Group.

“While we pride ourselves on our ability to attract top-notch professionals from outside the firm, it is perhaps even more important to develop our in-house talent,” said Hector J. Cuellar, the firm’s president. “Both Sean and Brad have played central roles in our growth, and we have no doubt they will continue to contribute to our success and that of our clients.”

U.S. Market Report Overview (from Flashwire Weekly)

Despite regional bank valuations being at all-time lows, the National City deal shows that buyers want even lower prices due to continued worries over the potential landmines on balance sheets. And the U.S. Treasury’s bailout plan may also be playing in a role in further belowmarket deals.

“Most of the take-under deals are being arranged with the regulating agencies,” said Charlene Davidson, Senior Managing Director at McGladrey Capital Markets. “Until regulators are more comfortable that the situation has been stabilized, they will push more banks to take these deals.”

Locked Out of Homeownership (from the San Diego Business Journal)

The mortgages were ascertained for risk and comingled with larger bundles of mortgages, then sold to investors all over the world. These mortgage-backed securities found plenty of investors, and for good reasons.

“They were relatively secure because they were backed by people’s homes, and in a good economy, they continued to appreciate in value,” said Charlene Davidson, an investment banker with Costa Mesa-based McGladrey Capital Markets. “There was a huge demand.”

Another factor that helped pump up the housing market was the banks’ expansion of their client base to include more low-income borrowers. Thanks to changes in regulations approved by Congress in 1999, banks pushed loans to borrowers who formerly wouldn’t have been able to qualify.

“Not only did they relax the standards, you could say they eliminated them,” Davidson said. “Honestly, anybody could get a loan.”

Damn the CFIUS, full speed ahead (from The Deal Newsweekly)

After Dubai, United Arab Emirates-based DP World's attempt to acquire U.S. port facilities was thwarted in 2006, a much more stringent Cfius law passed Congress. Now merged companies that violate conditions imposed by Cfius can see their deals broken up after they've been consummated. And foreign state-controlled purchasers can expect to have longer Cfius reviews. The Treasury Department may draft new rules by November.

None of this is dissuading buyers. "People have been willing to endure [Cfius] because the U.S. defense industry market is so large, everybody wants a piece of it," says Trevor T. Bohn, vice president at McGladrey Capital Markets LLC in Costa Mesa, Calif.

Southridge explores alternatives (from The Deal) (subscription required)

Sources said ethanol prices have been on the wane recently. "There's a glut of capacity, the prices have come down significantly. A lot of the spending into ethanol has been drying up," said Michael Parham, managing director at McGladrey Capital Markets LLC in Costa Mesa, Calif.

Parham said that while a renewable energy-focused policy is a sure bet in the U.S., demand has slowed for nowe_SEmDeven with production tax credit legislation for ethanol companies now before Congress.

U.S. Market Report Overview (from Flashwire Weekly)

As potential buyers hit their credit limit, sellers have to put in some of their own financing to help close a deal, says Charlene Davidson, Senior Managing Director at McGladrey Capital Markets LLC.

“We are seeing seller financing being used more often, either because the buyer requests it or the seller offers it,” Davidson said. Davidson said that many lenders are still able to provide financing, yet they are becoming much more stringent to whom they lend. Financing commitments have tighter covenants and lenders are scrutinizing inventories and other physical property more closely in asset-based loans.

Buyers, too, are putting in more protection on deals, with earn-outs becoming more common as a way to keep sellers on their toes after a deal. And material adverse change clauses are being written more specifically so buyers will have better ammunition to get out of a deal. For their part, sellers are calling for more break-up fees, especially in light of the many buyouts that have already gone awry.

Davidson says that deals, while they are still happening, are taking longer due to the increased diligence and more careful scrutiny from all sides.

“The volatility in the market is not normal,” Davidson said. “It can make somebody miserable one day, then happy the next. You want to be sure you have a tightly written deal so people can be satisfied with the outcome.”

Q and A with Hector J. Cuellar, President of McGladrey Capital Markets (from the Orange County Business Journal)

Hector J. Cuellar is president of McGladrey Capital Markets, a global investment bank specializing in mergers, acquisitions, divestitures, recapitalizations, restructurings, capital raising and fairness opinions. Under his leadership, the firm has completed more than 150 M&A transactions, tripled its average deal size, almost doubled its number of cross-border transactions, generated billions of dollars in liquidity for its clients and been annually ranked among of the nation's top 20 M&A advisors. Mr. Cuellar, who came to the firm from Banc of America Securities, has more than 25 years of experience in corporate and investment banking.

McGladrey Capital Markets Hosts Global M&A Symposium in London

More than 80 senior-level executives from major European corporations, private equity firms and law firms gathered in London yesterday to discuss the impact of the global credit crisis on mergers and acquisitions and capital markets overall.  The occasion was an international mergers and acquisitions symposium hosted by middle-market investment bank McGladrey Capital Markets LLC (www.mcgladreycm.com).  

Entitled “Global Mergers and Acquisitions: Converting Today’s Volatility into Tomorrow’s Opportunity,” the symposium featured a keynote presentation from Martin Taylor, chairman, Syngenta S.A..

Loan Squeeze Gets Tighter (from the San Diego Business Journal)

That retreat has slowed lending and investment of second-tier players such as private equity funds, hedge funds and asset-based finance companies, all of which depend on larger institutions for their funding, says Charlene Davidson, an investment banker with McGladrey Capital in Costa Mesa.

"Over the last six months, I’ve been seeing lots of private equity funds walk away from deals because the banks have pulled their financing," Davidson said. Things have gotten so bad that banks are reluctant to lend to each other, she says.

‘Crisis of Confidence’: Markets Short on Clarity (from the San Diego Business Journal)

At the center of the problem is the volume of bad loans that are contained in the billions of dollars of mortgage-backed securities, and how many of those mortgages will eventually sour, said analysts.

"The uncertainty here is really deep," said Charlene Davidson, an investment banker with McGladrey Capital Markets in Costa Mesa. "There’s a significant amount of private and public balance sheets that are holding some form of these derivative securities."

RSM EquiCo Changes Name (from The Deal) (subscription required)

M&A advisory firm RSM EquiCo Capital Markets LLC has changed its name to McGladrey Capital Markets LLC. The firm’s new name is a result of its closer integration with RSM McGladrey Inc., which provides accounting, tax and other business consulting services. Both firms are indirect subsidiaries of H&R Block Inc. Since Hector J. Cuellar took over as RSM president in 2004, the firm says it has tripled its average deal size and almost doubled the number of cross-border transactions.