Banks team to provide online M&A advice to companies valued below $50 million

Divvying up the work

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Merrill and CapitalKey investment bankers jointly will assist owners of companies valued between $10 million and $30 million to sell their businesses over the Internet. Merrill will refer clients below $10 million entirely to CapitalKey, which will do all the work. Clients ranging between $30 million and $50 million will be handled on a case-by-case basis, said Neal Goldman, CapitalKey founder and managing partner.

Merrill and CapitalKey will split the fees from any sales, a typical investment banking arrangement. The split ratio will vary, depending on who does what and other factors.

The deal is akin to Merrill's other recent online moves aimed at the booming small-business space.

Ray Chinn, senior engagement manager at Financial Institutions Consulting Inc., doubts that other investment banks will follow Merrill anytime soon. "Mass market products don't always work for investment banks' strategies," he said.

Merrill, meanwhile, is going to lengths to make sure its clients know about the CapitalKey deal, Albert said. For example, it will offer a link to CapitalKey from Direct Markets Online, its recently launched institutional investor portal.

CapitalKey, which launched late last year, can serve the smaller clients that the big investment banks won't because they do the bulk of their work over the Internet.

Investment bankers at Wall Street's big players typically spend much of their time jetting about the U.S., Europe and Asia, settling deals in person. M&A projects can take several months or more to complete.

CapitalKey markets deals over dedicated Web sites and via e-mail, in Internet time. "It can take months. We do it in 20 minutes," said Goldman, who previously worked for Lehman Bros. Inc.

Goldman, managing partner Steven Turner and other CapitalKey execs still help the process by doing some of the work the old-fashioned way: in person.

Marketing for the new service is built in, Goldman said. "Merrill Lynch has 15,000 brokers selling our product," he said.

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