Los Angeles-based investment banking firm Houlihan Lokey Howard & Zukin has agreed to be acquired by Tokyo-based Orix Corp. for $500 million in cash and stock.

Under the terms of the pact, Houlihan and Orix's U.S. arm will combine their operations into a company with $2.5 billion in assets that will keep the Houlihan name. Orix's U.S. arm will hold 70 percent of the new company, while Houlihan's partners will own the remaining 30 percent. The agreement is expected to close in the first quarter of 2006.

Reports first surfaced about the potential sale of Houlihan Lokey on Tuesday.

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