• Veteran dealmaker Corey Baylor to focus on the U.S. private equity industry


• Majority of investors remain optimistic about the outlook for private equity activity, according to a new report

NEW YORK, December 10, 2009 – BMO Capital Markets, the investment and corporate banking arm of BMO Financial Group (NYSE, TSX: BMO), has hired Wall Street veteran Corey Baylor as Managing Director, Financial Sponsors Group.

Based in New York, Baylor will advise a wide range of private equity firms looking to pursue dynamic investment strategies as markets improve. The addition of Baylor follows the appointment of Dirk Leasure earlier this month as Head of BMO Capital Markets’ Financial Sponsors Group.

“As the economic recovery continues, private equity is becoming a more active and important source of investment and corporate banking revenue,” said Dirk Leasure, also based in New York. “Addressing the needs of our financial sponsor clients is an essential component of our suite of capabilities and is critical to strengthening growth across our sector and product groups. Corey’s strong experience covering financial sponsor clients will help us capitalize on the emerging opportunities in this area,” Leasure added.

Baylor is a veteran dealmaker, and has strong relationships with a number of important financial sponsor clients. He spent more than thirteen years with Merrill Lynch & Co., most recently as a Managing Director in their Financial Sponsors Group and a member of that firm’s M&A Fairness Opinion Committee. Prior to working in financial sponsor coverage, he spent his career at Merrill Lynch in their Mergers & Acquisitions Group. Baylor began his investment banking career as a Financial Analyst in the Investment Banking Department of Kidder, Peabody & Co.

Baylor received a Master in Business Administration from Harvard Business School and a Bachelor of Business Administration in Accounting from Howard University.

“I am very optimistic about the transaction environment for private equity as the U.S. economic outlook improves,” said Baylor. “I look forward to providing the strength of BMO’s full-suite of investment and corporate banking capabilities to help clients meet their investment objectives.”

BMO Capital Markets’ Financial Sponsors Group works closely with private equity firms by providing advisory and capital markets services throughout the investment horizon of leveraged buyout transactions. In that context, the group serves as a strategic advisor and financing source for financial sponsors when they acquire companies, assists with add-on acquisitions and financings while the sponsor is invested in the company, and provides M&A advice and equity and debt capital markets services when the sponsor seeks to monetize the investment.

As markets continue to improve, BMO Capital Markets anticipates a substantial increase in private equity activity. In fact, the majority of North American private equity practitioners remain optimistic about the outlook for the upcoming year, according to a new report released by BMO Capital Markets in association with mergermarket and Akin Gump Strauss Hauer & Feld LLP.

Highlights of the study include:

• 81 per cent of private equity firms expect valuation gaps between buyers and sellers to narrow in 2010, with 45 per cent estimating in the first half of the year and 37 per cent estimating in the second half of the year.


• Of the investors surveyed, 76 per cent indicated their return expectations were equal to or higher than prior year expectations. The majority of private equity investors are still pricing mid 20 per cent to low 30 per cent returns while roughly 15 per cent indicated they would deploy capital for targeted returns of less than 20 per cent.


• The private equity industry has indeed been adjusting to more conservative credit markets, but the industry has not necessarily become less aggressive. In fact, 61 per cent of respondents say their targeted returns have remained unchanged for the past several years.


• Majority of respondents will not change their sector focus in the upcoming year. But of the respondents who do plan to change their sector focus, the Consumer and Technology industries are each cited by 67 per cent of respondents as the industries they expect to gravitate towards in the coming months, followed by Automotive, Financial Services, Healthcare, Industrials and Telecom which were identified by 33 per cent of respondents as sectors that they will most likely shift towards.

“BMO Capital Markets is exceptionally well-positioned to benefit from the overall increase in sponsor activity, which we have begun to observe. Moreover, we are experiencing an increased level of transaction activity within the business. We are also seeing more activity in sectors that we are focused on including the marketing services, education and media industries. Consequently, we are excited about the opportunity and believe that adding additional focus and people to this effort will produce substantial rewards,” said Leasure.

About BMO’s U.S. Financial Sponsors Group
A financial sponsor is another name commonly used to refer to private equity investment firms, particularly those private equity firms that engage in leveraged buyout or LBO transactions. BMO’s U.S. Financial Sponsors Group is a highly regarded team dedicated to providing coverage for these investors. The group offers clients a full range of investment and corporate banking capabilities including development of proprietary investment opportunities, M&A advisory, acquisition financing, restructuring and equity capital market services through a single point of contact. For more information visit, http://www.bmocm.com/industry/us/fs

About BMO Capital Markets
BMO Capital Markets is a leading, full-service North American financial services provider, with over 2,200 employees operating in 14 North American offices and 27 worldwide, offering corporate, institutional and government clients access to a complete range of investment and corporate banking products and services. BMO Capital Markets is a member of BMO Financial Group (NYSE, TSX: BMO), one of the largest diversified financial services providers in North America with US $359 billion total assets and more than 36,000 employees as at October 31, 2009.