MCF Corporate Finance buys Cubus in debt advisory expansion

As part of the deal, six professionals will be added to the MCF team, including Cubus' founders Matthias Magnus and Richard Rösener. They will join the MCF partnership, which currently stands at 12 partners, according to an official announcement.

The transaction is a result of a process which MCF started 18 months ago driven from a necessity to add debt advisory as a service offering to its consulting approach, Stefan Mattern, partner at MCF told Unquote.

The firm wanted to meet clients' increasing demand for M&A and financing consulting services from a single source and reached out to Cubus earlier this year with the intention to pitch "why it makes sense to combine M&A with debt advisory," said Mattern.

MCF approached Cubus as the two firms had collaborated a few times advising the sellside and PE bidders in several processes, he said. Most recently they advised Vorsprung Partners on the acquisition of Borsig Group. The two firms also have almost 90% overlap in their PE clients in the German space, including EMZ, Capiton, Lindsay Goldberg, he added.

Cubus' founders, having requests from their institutional clients to add M&A advisory as part of a one-stop solution in terms of service offering, engaged in a dialogue with MCF "from day one" and the two firms will start working together from an operational standpoint in Q4 2022, said Mattern.

MCF will now have five offices in Hamburg, Helsinki, London, Stockholm and Frankfurt and more than 70 corporate finance specialists.

The two firms will focus on their mutual integration over Q4 2022 and the beginning of 2023, said Mattern. The merger will provide opportunities for MCF to expand its M&A activities in Frankfurt, where new hires will probably be completed into 2023, he said.

Similarly, debt advisory experts will be appointed in Hamburg. In terms of MCF's geographical footprint, the DACH market is in bigger need for debt advisory services compared to the Nordics, he added.

Demand for one-stop M&A and debt advisory
The complexity of deals has been increasing over the last two to three years, as private equity clients proactively request both M&A and debt advisory services, said Mattern. Both debt-structuring and deal-making services are much sought after, he added, with half of the deals in Germany being associated with debt advisory as part of a new work stream.

In addition, the financing of M&A transactions is becoming increasingly challenging given the current geopolitical environment with the war in Ukraine and the pandemic, he said. "Even before the Ukraine crisis and the implications it has in financing, we had a very hot market for three years."

Moreover, intensified competition for good assets coming to the market calls for execution speed, where debt advisory can play a key role from a deal structuring standpoint, he added. Given that big PE firms have debt advisory capacities in-house, smaller players lose valuable time when they need to outsource these services.

MCF and Cubus' combined expertise is set to support the entire journey of institutional clients from investment to exit, said Mattern. As the M&A product is not relevant to institutional clients during the holding period, the debt advisory product can support PE clients with potential recapitalisation and add-ons, setting the right base for a successful exit, he said.

MCF has previously completed a merger with Keystone Advisers in Stockholm in 2016, followed by the strategic partnership with D.A. Davidson in 2018 to expand the transatlantic consulting business.

Company
Cubus is an owner-managed consulting boutique for corporate finance and financial restructuring. For more than ten years, the firm is providing services in the field of LBO and acquisition financing, bank-independent loan financing and financial restructuring in Germany.

People
MCF − Hans-Christoph Stadel (managing partner), Stefan Mattern (partner).
Cubus − Matthias Magnus, Richard Rösener (co-founders).

Advisers
MCF − DLA Piper (legal).

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• Topics
• Financials
• Advisory
• DACH
• Expansion
• Acquisition finance
• Germany