Piper Deal Leads Way as Boutique M&A Advisers Start to Merge
Piper Jaffray Agrees to Buy Sandler O’Neill for $485 Million
(Bloomberg) -- Boutique investment banks that advise companies on mergers are starting to find partners of their own.
Piper Jaffray Cos. said Tuesday it agreed to buy Sandler O’Neill & Partners LP for $485 million, and Canadian Imperial Bank of Commerce announced it plans to acquire Milwaukee-based Cleary Gull Inc.
Those mergers follow Raymond James Financial Inc.’s deal in April for Silver Lane Advisors LLC and PNC Financial Services Group Inc.’s takeover of Ambassador Financial Group, announced in January. Raymond James Chief Executive Officer Paul Reilly said last month he’s seeking more acquisitions to expand in businesses including mergers and wealth management.
Investors have been rewarding high-margin advisory businesses as the market for mergers and acquisitions heats up. Global deals are on pace to top $3 trillion for a sixth straight year. At the same time, the bank combinations can help small firms compete more effectively against Wall Street giants like Goldman Sachs Group Inc., which has said it’s targeting middle-market opportunities it previously shunned.
“Plenty of banks need to grow,” Jimmy Dunne, a Sandler O’Neill senior managing principal, said in a Bloomberg Television interview. “Technology costs and regulatory costs have made size more important, so the merger wave will continue,” said Dunne, who will become vice chairman of the combined company, Piper Sandler Cos.
Other recent examples:
- Boutique bank PJ Solomon sold a stake in itself to French bank Natixis SA in 2016 and has been expanding ever since.
- Japan’s Daiwa Securities Group Inc. has made investments in U.S. merger boutiques, including Baltimore-based Signal Hill Holdings LLC, and has been hiring from rivals.
- PJT Partners Inc. bought CamberView Partners Holdings LLC last year to expand its advisory services for shareholder activism and corporate governance.
- Stifel Financial Corp. bought GMP Capital Inc.’s advisory and trading business in a June deal.
--With assistance from Sonali Basak and Doug Alexander.
To contact the reporter on this story: Elizabeth Rembert in New York at erembert@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Daniel Taub
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