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Goldman Sachs Banker Uses Drone to Close M & A Transaction

The drone has arrived on Wall Street.

Goldman Sachs, the world’s top merger advisor, is one of the investment banks that uses drone technology to see at a glance which companies are bidding, according to Stephan Feldgoise, global co-head of the company’s M & A. is.

Virtual everything from shipping ports and railroads to chemical factories, warehouses and large retail stores, using commercial-grade drones after Covid-19 endangered hosting a direct visit with a group of bidders We carried out a tour. Said.

“We’ve been selling asset-based businesses around the world using drones for site visits and elevated roads,” Feldgoise said in a telephone interview. “When you’re buying a business, you want to see, touch, and feel what you’re buying, so it gives buyers the confidence they need.”

This is the latest example of how the pandemic forced a change into what was one of Wall Street’s most archaic and technically resistant corners. Investment banking traditionally relies on platoons in their twenties (using Excel and PowerPoint, software invented in the 1980s), their relationship is their most valuable asset, and lively dinners and social events. We supported senior bankers sharpened in Japan to executive officers and board members.

However, Coronavirus has put an end to face-to-face meetings and frequent business trips in the due diligence process in mergers and acquisitions. Today, you’re almost completely on-screen deals using conference call tools such as Zoom, BlueJeans, Cisco Webex, and Microsoft Teams. Instead of face-to-face site tours, drones are used for recorded videos and live sessions.

Of the hundreds of deals Goldman advised during the pandemic, more than 95% were done without face-to-face interaction, Feldgoise said.

Drones are likely to stay here, he says. “I believe it will change the outlook for M & A forever.”

Goldman is not the only investment bank using this technology. This technology began in the military and is beginning to be widely used in a variety of applications, from parcel delivery to great white shark surveillance. According to those who know the banking process, JPMorgan Chase, which has the world’s largest capital markets business in terms of revenue, is another company that relies on drone technology for trading.

Even boutique investment banks use them. Two minutes of aerial photography of the 130,000-square-foot headquarters as middle-market adviser TKO Miller glide through the company’s factory as building luminaire maker SPI Lighting helps market to competitors. I made a sizzle reel. Floor and warehouse.

“We have proved the benefits of drone video,” said veteran TKO bunker Erik Eidem. “The pandemic needed it, but people are very happy with it, they feel they are getting a better sense of business early on.”

Commercial drones cost around $ 1,000 or more, but bankers usually hire videographers who charge $ 10,000 or more for well-crafted and edited tours.

The new remote regime has withstood the fierce backlash of trading activity. After the calm in April, May, and June, when U.S. companies focused on raising billions of dollars in fixed income and stock markets to survive the pandemic, they turned to acquisitions and turned to new realities. Relocated itself. Third-quarter trading announcements increased 152% to $ 1.13 trillion, according to Dealogic.

According to financial data providers, Goldman is the top advisor in terms of transaction volume and transaction value, followed by Morgan Stanley, JP Morgan and Bank of America.

According to bankers, technological changes have changed the normal rhythm of the M & A process. In the past, advisors have screened potential buyers into a small number, say five, for management presentations. Now that the process is more efficient, Goldman and other bankers are working with twice as many bidders at a later stage to increase the odds of a successful match.

The use of remote technology can have a lasting impact on business travel and Wall Street corporate staffing needs, even after the pandemic is over. Microsoft co-founder Bill Gates said at the New York Times DealBook meeting this month that more than half of his business trips would probably not come back.

In the post-covid world, bankers are still on the road and looking for an edge in building relationships with key players. Jamie Dimon, CEO of JPMorgan Chase, said he “has no way” to reduce travel to meet clients and employees. However, according to bankers, an important part of the logistically complex and easier trading process than video conferencing will probably remain remote.

“I don’t know if 40 people will come back to the room to see management perform a dog and puppy show,” said a banker who frankly didn’t reveal his identity. “It takes a couple of days a week to get 40 people on a plane, have everyone stay in a hotel, attend a five-hour meeting and return. Now it literally takes only five hours. Meeting , And you haven’t left your home. “

Goldman Sachs Banker Uses Drone to Close M & A Transaction

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