Telecom Pro Lands at Blackstone

Thomas Middleton, a veteran telecommunications banker, joined the Blackstone Group in July as a Senior Managing Director in the firm’s m&a group. He worked at Merrill Lynch from 1994 to 2002. He was head of the firm’s global communication group and, eventually, became Vice Chairman of investment banking. More recently, working as a consultant, he advised Qwest Communications on its asset disposal program, assisting in the company’s 2002 sale of its directory services unit, QwestDex. The unit was sold for $2.75 billion to an entity owned by two private equity firms – Carlyle Group and Welsh, Carson, Anderson & Stowe. Middleton says he was attracted by Blackstone’s ability to bring an independent perspective to its clients. He adds that the firm can supply advice to senior management that will address the concerns of shareholders, debt holders, and other parties in a sale or restructuring. Looking back on his nearly 20 years of investment banking experience, Middleton says that one structural change in the industry has been the cyclic importance of product groups. “When I started at Kidder Peabody in 1985, product groups were new. There was a lot of emphasis on the technology of the m&a product itself but few groups dedicated to a specific industry,” he says. After going to work at Salomon Brothers in 1989, Middletown says he was assigned to the firm’s telecom-media-publishing team. He developed an expertise in telecommunications, which at the time involved doing deals for the recently launched Baby Bells. “We worked as strategic advisers for telcos that were looking overseas at the time.” During the 1990 to 1994 period of privatizations abroad, Middleton represented clients such as Bell South, which successfully bid for telecommunication assets in Australia. In 1994, Middleton joined Merrill Lynch, where he played a role in upgrading the relationship of the firm’s bankers from the treasurer’s office to the CEO’s office. There he found that, at least when the economy was expanding, teams that focused on industries worked. “We did most of our m&a at Merrill out of the industry groups. You need to be able to talk about client’s products.” He helped Bell Atlantic buy telecom properties in New Zealand during this period. And in a larger, domestic deal, he advised Bell Atlantic on its $23 billion merger with Nynex in 1996. He says the challenges of that deal were to structure it as a merger of equals with little dilution. Middleton’s deal list is headed by the $53 billion merger of Bell Atlantic and GTE in 1998 that formed Verizon. Middleton says he is proud to have helped build a true global telecommunications practice at Merrill Lynch. But in the wake of the economic downturn in 2000, he had little stomach to watch the group be shrunk and consolidated with other industry groups, although he understood why Merrill management chose that route. In the wake of the cutbacks at the firm, he worked as a consultant then eventually joined Blackstone. He believed it was a good time to hook up with a firm like Blackstone where he could function as an independent adviser who isn’t laden with institutional baggage. Looking forward, Middleton says that after years of playing defense after the Bubble burst, companies must now start to look outside their own operations for growth. “If you look at the cycle, while nobody expects a feeding frenzy, now is a time you can start building mind share and discussing strategic alternatives with CEOs and boards,” he says. Service Appointments AEG Partners – Robert Kors was tapped to head the Los Angeles office of this advisory firm specializing in distressed companies. He was formerly CFO at Roll International. Barclays Capital – The firm has appointed Reuben Daniels as managing director and head of the communications and entertainment investment banking group for the Americas. Previously, he was a managing director at Deutsche Bank. Paul, Weiss, Rifkind, Wharton & Garrison – Joseph Simons joined the firm as partner and co-chairman of its antitrust practice. He was previously director of the FTC’s Bureau of Competition. RBC Capital Markets – William Haffner was named a managing director in the firm’s leveraged finance group. Formerly, he was a VP and executive director in Morgan Stanley’s financial sponsor group. Rothschild Europe – Pehr G. Gyllenhammar has joined the firm as vice chairman. He was previously a managing director at Lazard. RSM EquiCo Capital Markets – The firm had hired John Dorey as a senior managing director. He was formerly a managing director at Geneva Cos. SSG Capital Advisors – Jonathan Costello was named director of private equity services at the firm. Formerly, he was director of fund investments at Safeguard Scientifics. Wachovia Securities – Steve Nason was appointed managing director in this bank’s financial institutions investment banking group. He previously held a similar position at Credit Suisse First Boston. Corporate Appointments ArvinMeritor Inc. – The company has announced that Nicholas Exton has been appointed VP of corporate development. He formerly had been VP of business development at Lucas Varity Heavy Vehicle Systems. ArvinMeritor supplies components to the automotive industry. Constellation Brands Inc. – The company has announced the promotion of Paul Hetterich to EVP of business development and corporate strategy. Previously he had been SVP of corporate development. Constellation Brands produces alcoholic beverages. Cyberonics Inc. – Edward Schutter has been named VP of corporate development. Formerly, he was VP of global business development at Solvay. Cyberonics develops medical devices for the treatment of neurological disorders. Kennametal Inc. – James Morrison was elected to the post of VP of mergers and acquisitions. He is a 31-year Kennametal veteran and will retain his role as VP and treasurer. Kennametal makes metal-cutting tools and mining and highway construction equipment. Pioneer-Standard Electronics Inc. – The firm has named Martin Ellis as VP of corporate development, a newly created position. Ellis joins the company from Stern Stewart, where he most recently had been SVP, principal, and head of corporate finance. Pioneer-Standard is a distributor of computer hardware and software. Copyright 2003 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.majournal.com