After nearly 10 years of international expansion, Lincoln International will have completed the BRIC - opening offices in Brazil, Russia, India and China - by the end of 2012, according to chairman and managing director Jim Lawson. The investment bank will open up its Beijing office by the end of the year, and its Sao Paolo office recently opened, Lawson says.
The global expansion allows Lincoln to offer mergers and acquisitions, debt advisory, restructuring services, and valuations and opinions globally. Lawson estimates that 40 percent or more of Lincoln's deals go cross border, but that international buyers are players in about 80 percent of transactions.
Why is it important to expand?
The majority of our business is selling companies, and when you go to sell a company, the owner of that business wants to get the best price and terms. You only have one chance to sell it, so you want someone who's going to optimize the buyer universe.
How did Lincoln International start its overseas expansion?
The first concept was "glocal," meaning global and local. It means being globally integrated and being able to manage on a local basis. In 2003, we went to Europe first because in the U.S. at the time, 80 percent of the companies that were sold outside the U.S. were sold in Europe. The European M&A market is just as large as the U.S. M&A market.
When Lincoln International opens new offices, does it partner with companies already established in the country?
We've opened in all sorts of ways. We've hired one person and built a team around them, we've gotten a team, or we've gotten a strategic partner that we need to team with.
China is the only place we're keeping the strategic partnership - it's the most centrally run economy in the world. You still have ownership by the government, so having contacts with the government is important. It's hard as a western firm to come in there and do that, and our partner China Everbright has those contacts.
Why is it important to establish a presence in China?
There's a lot of competition, particularly in China. China is in the papers a lot, and there's going to be a lot of cross border M&A business.
A very important part of our office in China is going to be serving our offices outside of China. If we're selling about 130 businesses, of those 130, 75 percent of them could have a Chinese buyer, and it's much more efficient to do it from an office in China. We're going to start with an office with four people that are dedicated to identifying and contacting buyers in China.
China has larger trade with Europe than the U.S., and the Chinese are much more aggressive about buying companies in Europe than the U.S.