Macquarie To Acquire US Investment Bank

Post by Sharat on October 1, 2009 · Under Business News, Company News, International Business News, Mergers & Acquistions, banking · Comment

Australian investment banking major Macquarie Group says it will acquire US based boutique investment bank, Fox-Pitt Kelton Cochran Caronia Waller LLC (FPK) for US130 million in cash, expanding its North American footprint and European financial advisory business.

The acquisition of FPK, which primarily provides financial institution research and advisory, would add more depth to Macquarie’s current pre-eminent position in the Asia Pacific region, Macquarie said on Thursday.

“Combining the FPK team with ours is the ideal way to expand our financial institutions presence beyond the Asia-Pacific into North America and Europe,” Macquarie Capital USA chief executive Tim Bishop said in a statement.

“We plan to develop and grow FPK’s valued specialist research, execution and advice and build their underwriting capacity.”

Macquarie’s FPK acquisition follows swiftly on the heels of its recent purchase of US asset manager Delaware Investments in August and Canadian energy investment boutique Tristone Capital Global back in May, as Macquarie seeks to expand into new businesses and geographies.

Since announcing that it would seek to raise further capital by issuing new shares in May, Macquarie has spent approximately $750 million on acquisitions including the current deal. Macquarie raised $1.21 billion from its share sale.

At the time of the capital raising, Macquarie chief Nicholas Moore said it was the firms goal to raise money before it was needed, to take advantage of any growth opportunities that arose. Mr. Moore said that the global financial crisis had resulted in many opportunities to grow the business.

The FPK deal consists of $US130 million ($A147.13 million) in equity value, plus $US16.7 million ($A18.9 million) of long-term liabilities, less cash on balance sheet at financial close.

The transaction will be paid for in cash, a fraction of which will be deferred over four years, post financial close of the deal, which will occur at the end of fourth quarter of 2009.

The acquisition adds weight to Macquarie’s financial institution research capability and will increase the number of financials covered by the firm to 765 globally, doubling its financials coverage in the US and Europe.

Founded in London in 1971, FPK employs 267 people, with the majority of staff located in the US and UK and a smaller number in Asia.

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