ONE of Wall Street’s biggest players in the last dot.com bubble yesterday returned with a bang to advise on the biggest tech merger this year, as fears mount over a fresh Silicon Valley crisis.
Former tech-banking heavyweight Frank Quattrone has been catapulted back into the limelight as adviser to National Semiconductor on its $6.5bn (£4bn) sale to Texas Instruments.
Advising the firm has put his boutique investment bank Qatalyst Partners in the big league, as the third -largest player in technology merger and acquisition activity so far this year.
Qatalyst has played a role in $10.3bn worth of technology deals in 2011, according to data provider Dealogic. And just two of Wall Street’s banking giants are placed higher – Goldman Sachs and Morgan Stanley.
The boutique’s involvement represents one fifth of all deal activity in the sector so far this year, as the volume of mergers and acquisitions hits its highest level since 2007. In total, 1,500 deals have been proposed, at a combined value of $59.3bn.
Yet the prince of Silicon Valley has returned as storm clouds gather.
The high valuations being placed on several technology firms have spooked some analysts, who fear a new bubble is emerging.
“Right now it looks like the money is getting crazy big,” says principal analyst at Enderle Group Rob Enderle.
“There’s certainly a lot of money being tossed around near the likes of Facebook and Twitter, where their revenues nowhere near stand up to valuations.”
Quattrone helped to bring hundreds of Silicon Valley’s fledgling firms public in the 1990s, including Amazon.com and Netscape.
But he all but disappeared from investment banking after charges he blocked an investigation into IPO kickbacks following the dot.com crash.
He took time out to fight his case through two trials, which were left unresolved. He ultimately reached a deal with prosecutors.
Quattrone has since rebuilt his reputation as Silicon?Valley’s go-to banker, after he set up Qatalyst in 2008.
Yet analysts have warned of a new dot.com bubble should companies with high valuations and low revenues go public.
“The interest [in Facebook and Twitter] suggests IPOs could be phenomenal, and if they peak and crash then they could take a lot of things with them,” Enderle said.