Signal Hill draws a bead on Updata

Contact: Brenon Daly

The aftershocks just keep reverberating across the tech banking landscape. Three months after Stifel Financial acquired midmarket bank Thomas Weisel Partners, another non-tech bank has used M&A to build up its tech advisory practice. On Tuesday, Signal Hill announced that it has purchased Updata Advisors, with all six of Updata’s bankers joining the Baltimore-based firm that has its roots in Alex. Brown.

The deal marks the fourth acquisition of a bank with at least one tech advisory credit so far in 2010. That compares to just six acquisitions in all of 2009. However, this year’s activity trails the massive consolidation we saw during the Wall Street turmoil of 2008, when no less than 14 banks – ranging from boutiques to multibillion-dollar financial giants – got snapped up.

Financial terms weren’t disclosed. But we understand that Updata’s partners rolled over their equity into Signal Hill and now hold a minority stake in the bank. Talks between the two sides played out rather quickly, just over the past three months or so. The firms are neighbors, and are relatively well-known along the mid-Atlantic seaboard. (To be clear, Updata Advisors – the M&A wing of Updata – will be moving under the Signal Hill brand, while the investment arm, Updata Partners, will continue doing business on its own.)

For Updata, the deal comes at a time when it has rung up a fair number of recent advisory credits. The boutique has five prints so far this year, including advising ChosenSecurity on its sale to PGP and PurchasingNet’s sale to Versata. Last year, Updata had sole buyside credit for Compuware’s $295m purchase of Gomez. Overall on our league table, Updata ranked 16th in 2009 and 10th in 2008 in terms of number of advised transactions.