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Footing The Bill: First-Half Sponsor Fees By Industry, Deal Size

Three industries saw payments by financial sponsors to investment banks more than double during the first six months of this year, compared to the same period in 2010, according to global data from Freeman & Co. analyzed by sister magazine Buyouts in its August 1 edition.

The Energy, power & commodities industry is the leader, based on this metric, with a 134.9 percent growth to $719.4 million from $306.2 million a year earlier. The other two sectors that witnessed this level of growth were financials (132.8 percent) and health care (113.6 percent).

Looking at actual payments however gives us a different leader. The industrial sector was the top industry in terms of total fees at about $1.11 billion. The total for industrial represents a 66.9 percent increase from a year earlier. Carlyle Group was the sector’s top spender at $122.7 million, while JPMorgan was the top earner at $148.4 million. In fact, Carlyle Group was the largest fee payer overall ($345.7 million) for the first half of this year and JPMorgan was the top fee earner ($663.1 million).

The consumer & retail sector ranked second with total payments of $918.5 million, a 57.8 percent increase from the comparable period in 2010. Leonard Green & Partners was the sector’s biggest spender at $64.3 million. Bank of America Merrill Lynch earned the most in the industry with $129.7 million.

The health care industry rounded out the top three fee pools, based on actual payments for the first half of 2011, at $767.9 million.

New York-based boutique advisory firm Freeman & Co. generated the fees data in conjunction with Buyouts magazine’s publisher, Thomson Reuters. The data looked at 149 deals ranging in all sizes from below $100 million to above $5 billion and included 33 with undisclosed deal valuation.

From those with known values, the $100 million-to-$250 million range accounted for the most deals with 41 during the first half of this year. The $2.5 billion-to-$5 billion segment represents the most based on total value of transactions at roughly $15.5 billion.

As for total advisory fees paid, the $500 million-to-$1 billion segment had the most fee payments at $127.64 million. This was followed by the $250 million-to-$500 million range at $80.02 million.

Citigroup had the largest market share in the $500 million-to-$1 billion segment with 9.50 percent. RBC Capital Markets followed with an 8.87 percent market share, followed by Bank of America Merrill Lynch at 6.88 percent.

The $100 million-to-$250 million range also had Citi holding the largest share of fees at 5.96 percent. Following Citi were: JPMorgan with a 4.36 percent share and Barclay Capital with a 3.68 percent.

Del Monte Foods Co. was the top transaction during the first half of 2011, based on enterprise value. On March 8, an investor group including Centerview Capital LP, Kohlberg Kravis Roberts & Co. and Vestar Capital Partners completed its purchase of the San Francisco-based producer of branded food and pet foods for $5.3 billion. Bank of America Merrill Lynch, Centerview Partners LLC, JP Morgan and Morgan Stanley served as advisers to the sponsors.

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