Piper Jaffray will acquire one of the
premier energy specialist investment banking firms, marking a major
expansion into the energy sector with a longstanding industry
leader
Piper Jaffray Companies (NYSE: PJC), a leading investment bank
and asset management firm, today announced that it has reached a
definitive agreement to acquire Simmons & Company International
(“Simmons”).
Founded in 1974, Simmons is one of the largest and most
experienced independent investment banks specializing in the energy
industry, offering M&A advisory, capital markets execution and
investment research. With over 170 investment banking, sales &
trading, equity research and private equity professionals, the
firm’s broad range of coverage spans the entire energy spectrum,
including energy services & equipment, exploration &
production, midstream and downstream. The average tenure for a
managing director at Simmons is in excess of 15 years, and during
its 41-year history, Simmons has executed more than 830 strategic
advisory transactions, over 330 private and public financings,
representing total transaction value of approximately $260 billion.
Simmons also manages two private equity funds in the U.K. that
specialize in energy. Headquartered in Houston, the firm also has a
major presence Aberdeen, as well as offices in London and
Dubai.
“Simmons is the preeminent firm in energy investment banking and
we are proud to have the opportunity to partner with such an
accomplished team. This addition represents a major step in our
drive towards $500 million in annual investment banking revenue,”
said Andrew Duff, chairman and CEO of Piper Jaffray.
“This is a milestone transaction as we meaningfully increase the
firm’s investment banking footprint. Expanding into the energy
sector has been a long-term goal for us and we are pleased to have
found the ideal partner to fulfill this strategy,” added Scott
LaRue, global co-head of Piper Jaffray investment banking. “We look
forward to combining our broader product suite with Simmons’ sector
expertise, unmatched reputation and extensive relationships to
build on the firm’s long history of success.”
“Simmons has been a name synonymous with excellence in energy
investment banking and providing quality service to clients for
over 40 years. This transaction is a logical step in taking our
firm to the next level as we expect our entire investment banking
and equities groups to transition to Piper Jaffray in a seamless
manner. Our clients will greatly benefit from the enhanced breadth
of products and capabilities that Piper brings to the table,” said
Michael Frazier, Simmons’ chairman, president and CEO. “On behalf
of my partners, we are additionally pleased to be combining with a
firm that shares similar values and our client-focused
culture.”
Transaction OverviewPiper Jaffray will acquire 100% of
Simmons for a total consideration of approximately $139 million,
consisting of $91 million in cash and $48 million in restricted
stock. Also, Piper Jaffray has committed an additional $21 million
in cash and stock for retention purposes. The restricted stock
included in the total consideration includes non-compete and
non-solicitation agreements. Additional compensation may be
available to certain individuals subject to exceeding certain
revenue thresholds during the first three years that Simmons is a
part of Piper Jaffray. Key Simmons professionals have entered into
employment agreements with Piper Jaffray that become effective
concurrent with the transaction’s close.
Piper Jaffray intends to operate the business under the Simmons
brand as a Piper Jaffray company and it will continue to run its
energy practice from Simmons’ Houston and Aberdeen locations. The
business will be integrated into Piper Jaffray’s equities and
investment banking group, with senior leaders at the firm assuming
senior leadership roles with Piper Jaffray. Fred Charlton will be
appointed chairman of energy investment banking and will serve as
co-head of energy investment banking together with James Baker.
Bill Herbert will become head of global energy research, and Will
Britt will continue to lead specialized energy equity sales. Ira
Green will become head of energy capital markets and Colin Welsh
will become head of international energy investment banking and
executive chairman of Piper Jaffray’s U.K. subsidiary, and continue
to lead Simmons’ international activities. Michael Frazier,
Simmons’ chairman, president and CEO, has entered into a consulting
agreement with Piper Jaffray and will continue to serve in a senior
role that leverages his relationship and experience.
Simmons generated revenue of $96 million, including $65 million
in advisory revenue, in its most recent fiscal year ended June 30,
2015. The transaction is expected to be accretive to Piper
Jaffray’s non-GAAP earnings during the first full year of
operation. Piper Jaffray intends to offset dilution from shares
issued in the transaction with future share repurchases under its
existing share repurchase program.
The transaction is subject to regulatory approval and customary
closing conditions and expected to close in the first quarter of
2016.
Conference CallAndrew Duff, chairman and chief executive
officer, and Debbra Schoneman, chief financial officer, will host a
conference call to discuss the transaction on November 17 at 9:00
a.m. ET (8:00 a.m. CT). The call can be accessed online via
Webcast, or by dialing 888 810-0209 and referencing conference ID
83074529. A copy of the presentation is available at
www.piperjaffray.com/simmons. A replay of the call will be
available beginning at approximately 12:00 p.m. ET (11:00 a.m. CT)
by calling 855 859-2056 and referencing conference ID 83074529.
AdvisorsNorton Rose Fulbright US LLP and Burness Paull
LLP are serving as legal advisors and Berkshire Capital Securities
LLC is serving as financial advisor to Simmons in connection to the
transaction. Faegre Baker Daniels LLP is serving as legal advisor
to Piper Jaffray.
About Piper JaffrayPiper Jaffray Companies (NYSE: PJC) is
an investment bank and asset management firm headquartered in
Minneapolis with offices across the U.S. and in London, Zurich and
Hong Kong. Securities brokerage and investment banking services are
offered in the United States through Piper Jaffray & Co.,
member NYSE and SIPC, in Europe through Piper Jaffray Ltd.,
authorized and regulated by the Financial Conduct Authority, and in
Hong Kong through Piper Jaffray Hong Kong, authorized and regulated
by the Securities and Futures Commission. Asset management products
and services are offered through three separate investment advisory
affiliates registered with the U.S. Securities and Exchange
Commission: Advisory Research Inc., Piper Jaffray Investment
Management LLC and PJC Capital Partners LLC.
Follow Piper Jaffray: LinkedIn | Facebook | Twitter
About Simmons & Company InternationalSimmons &
Company International is a leading financial advisory firm for the
energy industry with four offices worldwide and approximately 170
employees. The firm's corporate finance group specializes in
mergers and acquisitions and raising debt and equity capital across
the entire spectrum of the energy industry. Its research, sales and
trading team provides clients with proprietary, fundamental market
analysis on domestic and global macro energy issues, and in-depth
coverage of over 130 U.S and European companies. Simmons also
manages two private equity funds in the United Kingdom that
specialize in energy. Simmons & Company International is a
member of FINRA and SIPC. Simmons & Company International
Limited is authorised and regulated by the Financial Conduct
Authority in the United Kingdom and regulated by the Dubai
Financial Services Authority as a representative office in Dubai.
Simmons & Company International Capital Markets Limited is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom.
Cautionary Note Regarding Forward-Looking InformationThis
announcement contains forward-looking statements. Statements that
are not historical or current facts, including statements about
beliefs and expectations, are forward-looking statements. These
forward-looking statements cover, among other things, the future
prospects of the Company and the growth of our investment banking
business. Forward-looking statements involve inherent risks and
uncertainties, and important factors could cause actual results to
differ materially from those anticipated, including the following:
(1) the transaction described in this announcement is subject to
regulatory approval and other closing conditions and may not close
on the expected timing or at all; (2) the costs or difficulties
relating to the combination of the businesses may be greater than
expected and may adversely affect our results of operations and
financial condition; (3) the expected benefits of the transaction,
including revenue growth and realizable synergies for our
investment banking business, may take longer than anticipated to
achieve and may not be achieved in their entirety or at all, and
will in part depend on the ability of the Company to retain and
hire key personnel and maintain relationships with its clients; (4)
developments in market and economic conditions have in the past
adversely affected, and may in the future adversely affect, the
business and profitability of the Company generally and of its
investment banking business specifically; (5) the transaction will
expose the Company to the energy sector which is currently
experiencing an economic downturn; (6) other factors identified
under “Risk Factors” in Part I, Item 1A of our Annual Report on
Form 10-K for the year ended December 31, 2014, and updated in our
subsequent reports filed with the SEC. These reports are available
at www.piperjaffray.com or www.sec.gov. Forward-looking statements
speak only as of the date they are made, and we undertake no
obligation to update them in light of new information or future
events.
© 2015 Piper Jaffray Companies, 800 Nicollet Mall, Suite 1000,
Minneapolis, Minnesota 55402-7036
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151117005985/en/
Piper Jaffray CompaniesTom Smith, 612-303-6336Head
of Investor Relationsthomas.g.smith@pjc.comorPamela
Steensland, 612-303-8185Head of Media
Relationspamela.k.steensland@pjc.com
Piper Jaffray Companies (NYSE:PJC)
Historical Stock Chart
From Sep 2024 to Oct 2024
Piper Jaffray Companies (NYSE:PJC)
Historical Stock Chart
From Oct 2023 to Oct 2024