Gregg Lemkau was always a bit of a geek, but he learned to hide it early. “He’d be reading a comic book or some light magazine, and inside it would be a textbook,” recalls former Dartmouth College head soccer coach Bobby Clark of the young Lemkau, who played goalie for a team that made it to the National Collegiate Athletic Association’s Division I quarterfinals in 1990. Although Lemkau was studious, Clark adds, he competed hard and never stopped smiling.
Those qualities have served the father of four well. In September, Goldman Sachs Group named London-based Lemkau head of mergers and acquisitions for Europe, the Middle East, Africa and Asia-Pacific. He previously co-led the technology, media and telecommunications division with George Lee; Anthony Noto has succeeded him in that role. Lemkau, 42, left the post on a high note: This year Goldman ranks first in the TMT sector, with $107.6 billion in deal volume through mid-October, according to Dealogic — a 39 percent jump over the whole of 2010, when the firm ranked sixth.
Among other 2011 deals, Lemkau has advised U.K. software maker Autonomy Corp. on its $11.7 billion takeover by Hewlett-Packard Co. and private equity firm Silver Lake Partners on its $8.5 billion sale of online phone service Skype to Microsoft Corp. In a fundraising effort for Palo Alto, California–based Facebook, he helped Mark Zuckerberg’s social network secure $1.5 billion.
Lemkau describes his work as highly stimulating. “Every person you have the chance to interact with in this job is great at what they do,” he says. “It helps make you better at what you do, builds great experience and forces you to be on the top of your game.”
That includes jawing with clients like Russian Internet tycoon Yuri Milner, an investor in Facebook and founder of Hong Kong–based DST Global, whom Lemkau advised on the $5.7 billion initial public offering of Mail.ru Group last year. “We had a very profound conversation about the trends and the space,” the billionaire says. “Gregg’s extremely professional and knowledgeable about the Internet.”
At Dartmouth the Boston-born Lemkau planned to pursue a legal career. After graduating in 1991 with a degree in economics and government, he joined a leading law firm as an M&A paralegal. But his friends’ lives in banking appealed to him more, so the following year he started at Goldman as an analyst.
In the mid-1990s, Lemkau moved to San Francisco, where he helped launch Goldman’s tech M&A business. Returning to New York when the dot-com bubble burst, he became co-head of the health care group. He also spent a year as COO of Goldman’s investment bank before moving to London in 2008 to co-head the TMT team with Lee, who works out of San Francisco.
Lemkau and Lee, who have been friends since they took the same associate training class in 1994, combined forces for the Facebook deal. First, Lemkau oversaw the creation of a special-purpose vehicle for Goldman and DST to invest in Facebook and give it a large capital infusion without an IPO. Next, Lee led the due diligence to support Facebook’s valuation. Then Goldman’s private wealth management division raised money for the SPV from its global clients.
The deal — $375 million came from Goldman itself — was a complex cross-border transaction that needed to be done quickly, quietly and efficiently, Lemkau says. That meant coordinating around the clock through holidays, across divisions and around the globe.
Besides cash in hand, Facebook got an impressive new $50 billion valuation. As the relationship banker, Lee played a critical role in justifying that figure and getting Goldman’s clients comfortable with it. Facebook had already attracted investors such as Microsoft in 2007 and DST predecessor Digital Sky Technologies in 2009, but at those times its value was $15 billion and $10 billion, respectively.
The deal upset non-Goldman investors who wanted in on Facebook too. But Lemkau says it was a far more opportunistic and efficient way for Zuckerberg and company to raise capital than an IPO.
Although M&A activity has stalled in recent months, Lemkau doesn’t think the dry spell will last, because of the cheap cost of capital and bargain valuations for potential takeover candidates. “But for one missing factor, we would be experiencing an M&A boom, and that missing factor is CEO and board confidence,” he says, adding that a more stable macroeconomy will bring business back. When that happens, Lemkau will be ready to follow the ball. • •
