Piper Jaffray Companies has signed a definitive agreement to purchase Chicago-based asset management firm Advisory Research. The transaction is valued at $218m, payable at closing, composed of $178m in cash and $40m of restricted stock.
Brien O’Brien, chief executive officer of Advisory Research, will join the Piper Jaffray senior leadership team and report to Andrew Duff, chairman and CEO of Piper Jaffray. Mr O’Brien will continue to lead Advisory Research. He will provide leadership to the overall asset management business. Wiley Angell, CEO of FAMCO, the current Piper Jaffray asset management business, will continue to lead that organization.
Andrew Duff, chairman and CEO of Piper Jaffray, said: “Expanding our asset management business furthers our strategy of building a diversified investment bank and improving our overall pre-tax margin and return on shareholders’ equity. Advisory Research and FAMCO have complementary capabilities and position us to better meet client needs in the long term. With the addition of Advisory Research, asset management achieves sufficient scale to support further organic development.”
Mr O’Brien said: “I am excited to join Piper Jaffray and continue to grow the asset management business for the firm. Our first priority is to continue to provide our clients with the same disciplined investment process and level of service on which they have come to depend. Over time, we believe we can realize benefits from a broader product set and distribution and the global footprint of Piper Jaffray.”
Mr Angell said: “Advisory Research and FAMCO have a similar client-service and risk-control orientation, aligning us in our approach to the market. We remain focused on serving our current clients, and we believe we have an even stronger platform for future growth.”
The transaction is expected to close in the first quarter of 2010 and is subject to customary regulatory approvals and client consents.
