NEW YORK (Reuters) - Almost as surprising as Softbank Corp’s $20.1 billion deal to acquire 70 percent of Sprint Nextel Corp was the Japanese company’s choice of its key U.S. adviser.
While industry major Mizuho Securities Co Ltd acted as lead adviser in Japan and giant Deutsche Bank was given an advisory role, Softbank tapped the small and somewhat select merchant bank Raine Group as its lead U.S. adviser.
Raine, is ranked No. 30 among worldwide M&A financial advisers according to Thomson Reuters data, and is relatively unknown outside of the U.S. media and entertainment industries.
But Raine Group co-founder Jeff Sine and Softbank Chief Executive Masayoshi Son have a relationship that spans almost a decade. Their history together, which includes advising Softbank for much of the last few years in its talks with Yahoo Inc over Yahoo Japan and Alibaba Group, gave Sine the edge over the big investment banks, sources said.
“Jeff is very liked by Masayoshi Son,” said a source close to Sprint’s deal with Softbank, who added that Sine’s relationship with Masa, as the Softbank CEO is known, dates back to the banker’s days at UBS. “Jeff was critical to the deal.”
Sine himself appeared modest in an interview with Reuters on Monday.
“Today is all about the deal and client,” Sine said. “I don’t want to be seen as one of those bankers who is trying to make themselves a star. That’s not the right way to behave.”
After working in the media and technology investment banking practices of Morgan Stanley and UBS, Sine and former Goldman Sachs media investment banker Joe Ravitch launched Raine Group in 2009, consisting of an advisory arm and a private equity fund.
The pair, who combined have more than 40 years of experience as media and technology bankers, decided to focus on a small number of clients, aiming to model their efforts on the days when investment bankers were considered trusted advisers and confidantes to CEOs.
Indeed, the demise of the investment banker as trusted adviser was lamented by Evercore Partners’ Jonathan Knee, one of Sine’s former colleagues, in a 2006 book called, “The Accidental Investment Banker.”
One of Raine Group’s first big deals was advising Ari Emmanuel’s Hollywood talent agency Endeavor Agency in its merger with legendary William Morris Agency. The resulting entity, now known as William Morris Endeavor Entertainment, took a stake in the bank and has an investment in its private equity fund. Raine Group’s other investors are a mix of large sovereign wealth funds, including those run by the Abu Dhabi and Singapore governments.
Raine Group also served as adviser to Dick Clark Productions in its sale to investment firm Guggenheim Partners LLC this year and acted as co-adviser alongside Goldman Sachs in the sale of an 80 percent stake in basketball’s New Jersey Nets in 2009.
With its dual mandate, Raine Group was also an investor in a Sony-led consortium that bought EMI Music Publishing in a deal worth $2.2 billion.
Sources said Sine is more active on the advisory side of the bank while Ravitch is more active on the investing side - he is responsible for Raine’s investment in media company Vice, for instance. While at Goldman Sachs, Ravitch worked on the launch of the YES Network and The Weinstein Company, the movie studio founded by Harvey and Bob Weinstein after they left Miramax.
Reporting By Nadia Damouni and Peter Lauria in New York and Nathan Layne in Tokyo; Editing by Andrew Hay, Steve Orlofsky and Richard Pullin