Houlihan isn’t bringing in any new money from the offering. Instead, the offering was about raising Houlihan’s profile, giving the company’s longtime executives some liquidity and cashing out a sizable chunk of Orix’s stake. The Japanese finance giant bought 70 percent of the company for $500 million in 2006. After the offering, Orix now owns about 33 percent.
Beiser said Orix going from a majority to minority stakeholder won’t have any impact on Houlihan’s business, and that the decision to go public was mutual.
“We’ve always acted as a partnership and they’ve been great supporting partners,” Beiser said. “For 10 years, they’ve invested and they continue to be on our board going forward.”
Natsumu Tsujino, an analyst who covers Orix for JP Morgan Securities Japan Co. in Tokyo, said she was a little surprised Orix decided to divest so much of its stake, but it appears to her that Orix had determined Houlihan was not core to its business and that this was a good time to cash out.
“We believe Orix has not been able to generate much synergy through working with Houlihan, therefore, it makes sense to divest when the market is good and allocate the money to other investments,” she said in an email to the Business Journal.
Orix Chief Executive Makoto Inoue has mentioned his desire to aggressively pursue the acquisition of asset management firms in several interviews this year. After raising $168 million by selling shares of Houlihan, Orix has more cash to pursue deals.
Orix declined to comment for this story. But since Orix’s current 33 percent stake is valued at slightly less than $500 million – nearly the amount of its original investment – that appears to make last week’s $168 million in proceeds, plus some earlier sales, almost entirely profit for Orix.
Houlihan has about 1,000 employees in 18 offices around the world, having opened its newest shop in Sydney in January. The company earned net income of nearly $80 million in the 12 months ended March 31.
Beiser, who began at Houlihan when the firm had about 25 employees, said it was a dream come true to ring the opening bell at the New York Stock Exchange, and it was even more special to do so alongside colleagues he had worked with for decades.
Houlihan’s executive management team, which includes Executive Chairman Irwin Gold and Co-President Scott Adelson, has an average tenure of more than 25 years. Beiser said their long history and mutual understanding came out in a potentially scary way during one of the company’s pre-IPO meetings with investors.
“I was talking and I started choking on a cookie,” Beiser said. “Without missing a beat, one of my partners filled in the sentences. It was a seamless conversation – and I swallowed the cookie and survived.”
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