Piper Jaffray Companies Agrees to Acquire Weeden & Co., L.P.
February 25 2019 - 6:30AM
Business Wire
The combination builds a market-leading
equities business with Weeden & Co.’s highly ranked agency
execution platform and Piper Jaffray’s strong research sales
platform
Piper Jaffray Companies (NYSE: PJC), a leading investment bank
and asset management firm, today announced that it has reached a
definitive agreement to acquire 100% of Weeden & Co., L.P.
(“Weeden & Co.”), a broker-dealer focused on providing
institutional clients with premier execution services. Upon
closing, Weeden & Co. will convert to and operate as Piper
Jaffray & Co.
Founded in 1922, Weeden & Co. provides premier global
trading solutions, specializing in best execution through the use
of high-touch and program trading, proprietary algorithmic
strategies and derivatives. Headquartered in Greenwich, Conn., the
firm also has offices in New York, Boston, Chicago and San
Francisco. Weeden & Co. is a longstanding leader across
multiple equity trading categories, with recognition for 15
consecutive years from Greenwich Associates’ survey of the largest
sell-side portfolio trading desks.
The acquisition will significantly strengthen Piper Jaffray’s
position as a top institutional equities trading platform,
diversifying and expanding its client base while adding best in
class execution capabilities and proprietary technology. The
transaction will complement Weeden & Co.’s existing business,
through Piper Jaffray’s added research and equity capital markets
capabilities. Together, both firms will be more competitively
positioned to add long-term value for clients.
“Today’s announcement represents an exciting and important step
forward,” said Deb Schoneman, president of Piper Jaffray. “As our
investing clients unbundle how they access and evaluate research
and best execution, we continue to strengthen our equities
offerings. Weeden & Co. brings an immediate leadership position
in equity trading that makes Piper Jaffray’s platform far more
robust and relevant, while adding resilience across market
cycles.”
The combined trading platform will be led by Weeden & Co.’s
current CEO, Lance Lonergan, who will join Piper Jaffray as the
firm’s head of global equity execution.
Lonergan commented, “This transformative combination of two
market-leading equity franchises broadens distribution for capital
markets and investment advice, while deepening our liquidity pool.
Piper Jaffray is an ideal partner to expand our offerings with its
highly regarded research and capital markets platform.”
“Weeden & Co. is a firm we have long respected and admired
for its talented team and best-in-class trade execution,” added Tom
O’Kane, co-head of global equities at Piper Jaffray. “We look
forward to combining our broader product suite with Weeden &
Co.’s trading expertise and technologies, and more importantly,
bringing together two firms that share a similar vision and
culture.”
Transaction OverviewPiper Jaffray will acquire 100% of
Weeden & Co., L.P. Prior to closing, Weeden & Co. will
distribute 100% of excess capital to its shareholders. The total
upfront consideration is $42 million, consisting of $24.5 million
in cash and $17.5 million in restricted cash and retention stock.
There is an earn-out opportunity of up to $31.5 million based on
combined non-deal equity sales and trading revenue. The retention
consideration includes non-compete and non-solicitation agreements.
Key Weeden & Co. professionals have entered into employment
agreements with Piper Jaffray that become effective concurrent with
the transaction’s close. For a copy of the investor deck, please
visit piperjaffray.com/weeden2019.
In this transaction, Piper Jaffray Companies will acquire Weeden
& Co., L.P., an execution broker-dealer for institutional
clients. The sale does not include the holding company Weeden
Investors, L.P., Weeden Prime or any of its other affiliates.
Finn Dixon & Herling LLP is serving as legal advisor to
Weeden & Co. and Faegre Baker Daniels LLP is serving as legal
advisor to Piper Jaffray in connection to the transaction. The
transaction is subject to customary closing conditions and expected
to close in June 2019.
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 our equities sales and trading
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 realizable cost synergies for our equities sales and
trading business, may take longer than anticipated to achieve and
may not be achieved in their entirety or at all; (4) the success of
the transaction is dependent on the ability of the Company to
retain and hire key personnel and maintain relationships with our
clients; (5) 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 equities sales and trading business specifically; (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, 2017,
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.
Piper Jaffray Companies (NYSE: PJC) is a leading investment bank
and asset management firm. Securities brokerage and investment
banking services are offered in the U.S. through Piper Jaffray
& Co., member SIPC and FINRA; in Europe through Piper Jaffray
Ltd., authorized and regulated by the U.K. Financial Conduct
Authority; and in Hong Kong through Piper Jaffray Hong Kong
Limited, authorized and regulated by the Securities and Futures
Commission. Asset management products and services are offered
through five separate investment advisory affiliates―U.S.
Securities and Exchange Commission (SEC) registered Advisory
Research, Inc., Piper Jaffray Investment Management LLC, PJC
Capital Partners LLC and Piper Jaffray & Co., and
Guernsey-based Parallel General Partners Limited, authorized and
regulated by the Guernsey Financial Services Commission.
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© 2019 Piper Jaffray Companies. 800 Nicollet Mall, Suite 1000,
Minneapolis, Minnesota 55402-7036
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version on businesswire.com: https://www.businesswire.com/news/home/20190225005148/en/
Tim CarterChief Financial OfficerTel: 612
303-5607timothy.l.carter@pjc.com
Pamela SteenslandHead of Marketing, Events & TravelTel: 612
303-8185pamela.k.steensland@pjc.com
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