Goldman Sachs and Morgan Stanley are reaping rewards for jumbo M&A
Hi! Aaron Weinman reports from New York. Amazon’s $3.9 billion purchase of One Medical could net Goldman Sachs and Morgan Stanley millions of dollars each in consulting fees. It comes as investment banks come under scrutiny for a slow year in doing business.
Let’s unpack who made this deal at the two Wall Street giants.
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1. Goldman Sachs and Morgan Stanley won Amazon’s $3.9 billion purchase of One Medical. It’s a welcome payday for the pair, especially after Wall Street investment banking teams absorbed much of the pain of last quarter’s earnings cycle.
Goldman Sachs advised Amazon and rekindled a relationship dating back to 2017 when the company bought Whole Foods Market for $13.7 billion, and Morgan Stanley advised One Medical on the sale, Insider has learned.
Morgan Stanley has now advised One Medical on at least three occasions, having continued its leadership role in the clinic operator’s $245 million IPO in January 2020 and the $2.1 billion acquisition of Iora Health last June.
Amid a lack of M&A activity, a deal of this magnitude should net any bank millions of dollars in fees. Investment banks typically earn between 2% and 4% (of the enterprise value of a transaction) in revenue for their advisory services. However, a coveted customer like Amazon could prompt banks to lower their prices in exchange for the tech giant’s business.
Amazon’s interest in One Medical, meanwhile, began as early as spring 2022, a person with knowledge of the process told Insider. But the company was not looking for a buyer at the time, this person said.
News of Amazon’s acquisition sent One Medical’s share price soaring to more than $17 a share from just over $10 a week last week.
For the full story of how this deal came to be, and the bankers who helped piece the deal together, read this report by Insider’s Reed Alexander and myself.
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