SoftBank-ARM Deal Brings Together Morgan Stanley Alumni

The New York Times
By Anita Raghavan
July 18, 2016


It’s another reunion of Morgan Stanley alumni.

When SoftBank of Japan announced on Monday a $32 billion deal to acquire the British chip designer ARM Holdings, it was notable for a number of reasons, including its being the first major deal to be announced since Britain’s vote to leave the European Union.

But the deal also represented a reunion of former Morgan Stanley bankers who, working from newly minted independent investment banks and at the client, SoftBank, convened from different parts of the globe to advise Japan’s third-largest telecommunication company.

SoftBank’s lead adviser was Jeffrey Sine at the Raine Group, which was founded in 2009 by a former Goldman Sachs banker, Joseph Ravitch, and Mr. Sine. Until 2001, when he left to take a senior position at the Swiss bank UBS, Mr. Sine was the global head of media and communications investment banking at Morgan Stanley.

He first got to know SoftBank in the mid-1990s. While working for Morgan Stanley he helped the Japanese company, then under the radar, acquire a trade show production company for $200 million. The tiny deal was the start of a long relationship between Mr. Sine and Masayoshi Son, SoftBank’s founder and a gifted investor.

Soon after, Mr. Sine advised on SoftBank’s acquisition of the publishing company Ziff-Davis. Three years later, he helped SoftBank take Ziff-Davis public.

And when Mr. Sine and Mr. Ravitch started their own business, Mr. Son gave them one of their biggest advisory assignments: spearheading SoftBank’s acquisition of a controlling stake in Sprint for $20.1 billion.

Since last summer, Mr. Son has had another Morgan Stanley banker helping him execute his acquisition strategy. In June 2015, Alok Sama, a former Morgan Stanley telecommunications banker who had worked for the investment bank in New York, Hong Kong and London, joined SoftBank as chief financial officer.

When Mr. Son’s heir apparent, Nikesh Arora, abruptly left SoftBank this summer, Mr. Sama took on the additional title of president. He also brought on board Alex Clavel, another managing director from Morgan Stanley who is working on the ARM acquisition.

Mr. Sine had worked on deals with Mr. Sama when he was a young investment banker for Morgan Stanley in Asia. Mr. Sine also knew the team at Robey Warshaw, the London investment banking boutique that is also advising SoftBank on the deal. Besides knowing Simon Robey from his Morgan Stanley days, Mr. Sine had worked with Simon Warshaw, Mr. Robey’s partner, when he was at UBS.

With the United Kingdom in a state of political flux after the European Union referendum and in the midst of a government changeover, it was important for SoftBank to engage a well-connected British banker to lay the groundwork for what would be the largest inward investment into the United Kingdom by an Asian company.

About three weeks ago, Mr. Sama called Mr. Robey, the former head of Morgan Stanley’s British operations. Mr. Sama had an interesting proposition for him: SoftBank was looking to purchase ARM and, if Robey Warshaw didn’t have any client conflicts, Mr. Sama wanted to engage the firm.

Unlike the bid by Deutsche Börse to acquire the London Stock Exchange, in which the deal makers representing both companies were former Morgan Stanley investment bankers, in the ARM acquisition only the SoftBank side is heavily represented by ex-Morgan Stanley bankers.

And while Morgan Stanley itself is not in on the deal, the firm continues to have a commanding presence in the overall merger and advisory league tables.

With $357.9 billion of announced deals to its name so far this year, Morgan Stanley stands at No. 2, far behind Goldman Sachs, which is advising ARM on the SoftBank deal and can lay claim to $496.5 billion of deals, according to Thomson Reuters.