Investment bank closing array of deals
Investment banking boutique Mesa Global has quietly racked up an estimable array of clients and top execs since embarking on a dramatic expansion earlier this year.
Mesa, short for Media and Entertainment Strategy Advisers, has attracted the interest of Management 360, which has taken a minority stake in the firm and provided space in its L.A. headquarters.
In a tumultuous economic climate, the company has gone from a two-man mergers-and-acquisitions outfit to a firm with a staff of 20 that has helped close four media deals and completed six private placements this year.
The deals include Conde Nast’s purchase of tech blog Ars Technica; New York Media’s acquisition of MenuPages; Fantasy Sports Ventures’ $10 million infusion from Gannett; and the Guardian’s purchase of PaidContent parent ContentNext.
Isaac Palmer, a longtime exec at Paramount and Fortress Investments and a notable architect of studio slate-finance deals, has come aboard in L.A. as a managing director.
Palmer is known in Hollywood as one of the architects of the first Melrose Fund at Par. At Fortress, he ranged beyond film into other media and entertainment sectors. Given the current climate, no slate pacts are imminent, but single-picture financing is also a possibility and, longer term, the aim is to mobilize slate deals.
Helping guide the firm’s expansion, especially in the digital arena, is managing director Mark Patricof. He is an eight-year CAA staffer and son of Alan Patricof, the private equity pioneer who, during a 40-year venture capital career, has helped launch Apple Computer, AOL and many other household names.
Other managing directors include Jerome Levy, formerly of Goldman Sachs and Canal Plus; Brian Richards, formerly of PricewaterhouseCoopers; and ex-McGraw-Hill exec Michael Bijaoui. Levy and Richards had been running Mesa for about four years when they began discussions about upsizing the firm in mid-2007 with Patricof, whom they had met years earlier.
“We had a nice business initially, but we wanted to get into the businesses where Mark was, in the digital space, so it seemed like a good combination,” Richards said.
The bulked-up Mesa is hoping to serve a rapidly evolving media and entertainment landscape in which Will Ferrell backed FunnyorDie.com and, with backing from CAA, quickly cashed in, and McG doesn’t just direct the next “Terminator” film but anchors a multi-platform product rollout.
Middle-market deals valued between $100 million and $300 million are the sweet spot, though Mesa has played a role in richer deals.
Execs hope to emulate firms such as Allen & Co. or Montgomery Securities, with the twist that it wants to be more of a pure-play media and entertainment entity. That means a broad menu that includes Broadway, music, print, film, TV and the Web.
Accordingly, Mesa’s client list, while peppered with newbies like Kick Apps, also includes mature congloms such as Nickelodeon, BMG and Variety parent Reed Business Information.
“We have a different approach from other investment banks that are focused on transactions,” Patricof said. “We are stage-agnostic, so we’ll do everything from seed money to restructurings to Series A private placements to M&A. We also work with clients in between transactions with the goal of creating long-term partnerships. In that sense, it’s closer to the agency model.”
Ties to Hollywood and the talent pool are also a crucial part of Mesa’s growth plan — thus the link-up with Management 360.
“Talent is still the single biggest driver in the intellectual property arena, so we want to be able to more easily collaborate with talent,” Patricof said. “That’s what 360 gives us, and we will give them access to our financial resources in return.”
Fees for advising companies in general, with or without a deal looming, provide revenue, and Mesa also gets equity stakes in some companies, especially the early-stage ones.
Last spring, the firm moved into offices just west of Union Square at 85 Fifth Avenue in New York.
“We want to bring old media and new media together,” Patricof said. “Though that distinction is going to get less and less and less pronounced the longer we do this.”