Lazard acquires investment bank
By: Kira Bindrim
Published: July 10, 2007 - 12:51 pm
Bruce Wassersteinâ€s Lazard Ltd. said Tuesday that it was acquiring investment bank Goldsmith Agio Helms & Lynner in an effort to jumpstart its own middle market business.
The acquisition, Lazardâ€s first since going public in 2005, will allow Lazard to use Minneapolis, Minn.-based Goldsmith as the foundation for a new division of its financial advisory business. Middle market business accounts for more than 2,000 deals every year.
Goldsmith specializes in advising closely-held companies worth between $50 million and $500 million on enhancing liquidity, optimizing value, mergers and acquisitions, initial public offerings and recapitalizations.
Last year, Goldsmith completed over 60 advisory assignments, 42 of which resulted in transactions. The company will also help Lazardâ€s larger clients gain access to this growing market.
“Goldsmith is a well-known firm in that market and we think this is an attractive opportunity for us to grow there,†says Barry Ridings, vice chairman of Lazardâ€s investment banking business. Lazard will gain about 90 employees, who now work in Goldsmithâ€s offices in Minneapolis, Chicago, Los Angeles, New York and Shanghai.
“Many of our clients are looking to access international, large and multi-national players or transaction partners,†says Goldsmith Chairman Jack Helmes. “To be able to plug into Lazardâ€s relationships and network is very valuable to us and our clients.â€
Financial advising comprises 60% of Lazardâ€s revenue, which topped $1.5 billion in 2006. Revenue from advising was little changed in the first quarter, compared with a 17% jump in advisory-related revenue at Goldman Sachs Group Inc. and a 10% gain at Morgan Stanley. Revenue from financial advising accounts for less than 7% of total revenue at both Goldman and Morgan Stanley.
In February, Lazard announced plans to acquire 50% of the Buenos Aires, Argentina-based MBA Group, to expand its financial advisory business in Central and South America. MBA is the parent company of MBA Banco de Inversiones, also an investment banking and asset management firm. Lazard already has a financial service foothold in Brazil after inking a joint venture with Signatura Advisory of Sao Paulo, Brazil to create Signatura Lazard in 2004.
Shares of Lazard climbed as much as 2.8% to $46.94 in Tuesday morning trading, and were up 2% intraday. Since the company went public in May 2005, shares have risen 82.6% from its offering price of $25 per share.
Financial terms of the Goldsmith deal were not disclosed. The transaction is subject to regulatory approval by the National Association of Securities Dealers.
