It’s the firm’s second international acquisition in two months as part of Houlihan Lokey’s strategic foray to compete against larger investment banking shops.
The acquisition of GCA also is expected to boost total employment at Houlihan Lokey by about a third to 2,000 employees worldwide.
In July, Houlihan Lokey purchased London-based boutique advisory firm Baylor Klein Ltd.
The deal for GCA is Houlihan Lokey’s largest to date.
“The acquisition of GCA will create one of the largest technology advisers in the world, one that more closely matches the size and importance of this sector in today’s global economy,” Scott Beiser, chief executive of Houlihan Lokey, said in a statement.
The addition of GCA is expected to “significantly expand” Houlihan Lokey’s presence in Europe and Asia, and establish the company as “one of the most geographically diversified investment banking firms among our peer group,” Beiser said.
Houlihan Hokey focuses on advising small and mid-cap companies up to $10 billion in value. Its specialty is technology investment banking, considered a hot sector for
dealmaking.
Boutique banks have been consolidating in recent years to compete with banking giants such as Goldman Sachs Group Inc. and JPMorgan Chase & Co.
GCA’s board has approved the deal, and Houlihan Lokey’s tender offer will run from Aug. 4 to Sept. 27, according to the statement.
The tender offer is expected to close on Oct. 4. Following the tender offer’s completion, it is expected that Houlihan Lokey will acquire all shares not tendered through a second-step process at the same price.
Upon the completion of the transaction, including the second step, GCA will become a privately held company, and shares of GCA common stock will no longer be listed on any public market.
Tokyo-based GCA is a global investment bank with more than 500 employees in 24 offices.
Houlihan Lokey now has more than 260 bankers in Europe, up from 80 in 2014.
Also last week, Houlihan Lokey reported profits of $86 million on revenue of $373 million in its first fiscal quarter that ended June 30, compared to profit of $46 million on revenue of $211 million in the same year-ago period.
As of June 30, the company had $830 million of cash and cash equivalents and investment securities, and $46 million of other liabilities and loans payable to former shareholders.
