The power behind Jones Day’s mid-market M&A knock-out

It’s no wonder that Jones Day’s London office has been on a corporate associate shopping spree over the past year, hand-picking eight new associates to handle its increased workload.

According to the latest figures from Thomson Reuters, the firm has worked on more mid-market M&A deals with UK involvement than any other during the first six months of 2014. And by a fairly significant margin (14 July 2014).

Jones Day had a hand in 42 deals with a value of less than $500m between 1 January and 30 June 2014. Its closest competitors are DLA Piper, which worked on 38, and Freshfields Bruckhaus Deringer, which advised on 30.

The leading firm’s 42 deals had a total value of $2.6bn, making DLA Piper’s $1.2bn total look relatively puny. Freshfields’ $2.5bn was closer to the mark.

However, the most interesting part of this story is the enormous growth of Jones Day’s UK-related mid-market M&A activity over the past six months.

The firm almost doubled the number of transactions it advised on within that space from 22 to 42. As a result, the total value of these combined deals also rocketed up by 121 per cent.

The uptick in global mid-market M&A, which increased by 17.9 per cent on the same period in 2013 to more than $399bn, no doubt gave Jones Day a helping hand. After all, for the full year 2013, 94 per cent of the firm’s 369 global M&A transactions fell within the mid-market space.

The firm’s UK corporate head Giles Elliott admits that mid-market work is, “definitely our sweet spot”.

But how did the US-headquartered firm grow its offering in the UK quite so effectively while rivals including Linklaters, Eversheds and Allen & Overy saw their total number of mid-market M&A deals and their commensurate value diminish? Even DLA Piper, known for its strength in the mid-market, saw its deal volume inch up by just 8 per cent.

It partly comes down to Jones Day’s burgeoning private equity practice, which has been reaping the rewards of building out its offering in the City. Its sole corporate hires in London over the past year came in the form of former Berwin Leighton Paisner private equity duo Raymond McKeeve (20 August 2013) and Mike Weir (8 October 2013).

The pair turned up at their new firm with a number of portable and lucrative clients. McKeeve’s existing relationship with private equity giant Blackstone helped Jones Day secure its first purely corporate mandate in London by the client, the sale of Independent Clinical Services to TowerBrook Capital Partners for an undisclosed sum.

Meanwhile, Africa-focused firm Helios Investment Partners – another loyal client of McKeeve’s – has also instructed the firm for the first time.

The new clients sit neatly aside Jones Day’s existing private equity relationships in the City, which include middle market-focused operation JF Lehman and the Riverside Company, which also sets its sights on small and medium-sized enterprises. According to the firm, both of these clients have been on the acquisition trail in Europe over the past year.

In fact, private equity-related work has been such a hit for the firm that it has tipped the balance of its corporate practice in its favour. Elliott suggests that the split between corporate and non-corporate work in the office currently lies at about 40:60. And that breakdown is unlikely to waver in the near future.

The firm’s private equity practice is currently oriented fairly heavily around transactions in the mid-market, but Jones Day hopes to use its sturdy stance within the space to take the offering onward and upward.

“Right now, we’re advising in relation to a lot of mid-market deals on the private equity side,” said Elliott. “But in time, we would expect to get the big ticket deals”.

The over-arching success of Jones Day’s mid-market practice helped it to secure the top spot in terms of total global M&A deal volume in 2013 – working on transactions with a combined value of almost $233.5bn.The firm will be hoping that its latest tack in the City will help to boost this further when the final results are totted up for 2014.