Perella Weinberg Inks Deal With Betsy Cohen’s SPAC
Perella Weinberg Inks Deal With Betsy Cohen’s SPAC
(Bloomberg) -- Perella Weinberg Partners is finally going public.
The boutique investment bank, the subject of IPO speculation ever since its founding in 2006, agreed to combine with a blank-check company sponsored by finance entrepreneur Betsy Cohen. The deal with FinTech Acquisition Corp. IV, Cohen’s special purpose acquisition company, values the combined firm at about $975 million, according to a statement Wednesday.
“Coming out of Covid, we feel that we are entering a new, long-term period of expanded demand for expert, independent advice,” Cohen said on a conference call with analysts and investors. “In our view, PWP represents the most compelling investment opportunity to capitalize on this growth opportunity.”
Cohen’s SPAC emerged as the likely acquirer soon after Bloomberg reported in November that Perella Weinberg was in talks with blank-check suitors. The bank delayed an initial public offering last year after filing confidentially, people familiar with the matter said at the time. It had already taken steps to prepare for the IPO by naming Peter Weinberg chief executive officer and spinning off asset-management units.
Ever since Wall Street veterans Weinberg and Joe Perella founded the firm, investment bankers have speculated on when it might pursue an IPO to raise money for itself and owners. Its market debut is meant to open a fresh phase of growth, a move long anticipated by the industry. The firm has been elevating team members, expanding internationally and separating asset management to focus on dealmaking.
Debt Free
FinTech IV will fund the purchase with its $230 million of cash and raise an additional $125 million through a private placement, according to the statement. Perella Weinberg expects to have no debt when the transaction is completed, with access to additional liquidity under an untapped revolving credit facility.
“We are experiencing elevated demand for capital-raising and liability-management services,” Andrew Bednar, co-president of Perella Weinberg, said on the conference call. “At the same time, we are seeing a resurgence in M&A activity. We believe that dynamic will persist for the next few years as the high level of debt issuance earlier in 2020 sets up an extremely active refinancing calendar over the next several years.”
Perella Weinberg had $533 million in revenue last year, according to a presentation Wednesday. That compares with $718 million at PJT Partners Inc. and $747 million at Moelis & Co., both younger rivals. For 2020, Perella Weinberg estimated revenue of $485 million, a 9% decline from last year.
Blank-check companies are abounding, with almost 250 listing in the U.S. this year and raising roughly $80 billion for potential acquisitions, according to data compiled by Bloomberg. Many are chasing closely held firms reluctant to go public on their own in turbulent times.
Cohen, who founded Jefferson Bank and Bancorp Inc., a provider of technology solutions to non-bank financial companies, has been involved with several blank-check firms, all focused on targets in the fintech and tech sectors.
Shares of FinTech IV rose 5.1% to $11.40 at 12:11 p.m. in New York, paring an earlier gain of as much as 15%.
Fidelity, Wellington
Investors including Fidelity Management & Research Co., Wellington Management and Korea Investment & Securities have agreed to buy stock in a private placement to support the Perella Weinberg deal. Net proceeds from the transaction will first go toward repaying debt, while as much as $110 million will be used to redeem a portion of ownership interests tendered by some Perella Weinberg holders, according to the statement.
Working partners and employees of the advisory firm are expected to hold about 50% of the company after the deal is completed, slated for the first half of 2021, after approval from FinTech IV stockholders and regulators.
Both of Perella Weinberg’s founders have long histories in finance. Weinberg was once CEO of Goldman Sachs Group Inc.’s European business, and worked at Morgan Stanley earlier in his career. His family had run Goldman for the better part of its existence, starting with his grandfather Sidney Weinberg beginning as a janitor in the early 1900s and rising to become the head of the firm.
Perella, who had previously founded investment bank Wasserstein Perella, was a top dealmaker at Morgan Stanley before striking out in what he once called a “protest resignation” against that firm’s CEO and strategy. He took a number of his proteges over to found Perella Weinberg Partners, while also recruiting top bankers from rival Goldman.
Goldman, JPMorgan Chase & Co. and Financial Technology Partners served as financial advisers to FinTech IV, while Keefe Bruyette & Woods served as buy-side adviser. Cantor Fitzgerald & Co., JMP Group LLC and Wells Fargo & Co. acted as capital-markets advisers to the SPAC, while Goldman and JPMorgan were private-placement agents.
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