Piper Jaffray to Acquire Simmons & Co. - Thoughts?
Title says it all, link inside post:
Piper Jaffray Cos., the investment bank founded in 1895, agreed to buy Simmons & Co. for dealmaking in the energy industry.
Piper Jaffray will add more than 170 professionals offering merger-and-acquisition advice, equity research and sales and trading, the Minneapolis-based company said Tuesday in a statement. The buyer will pay $139 million, with $91 million in cash and the rest in restricted stock, according to the statement. Piper Jaffray committed an additional $21 million to retain staff.
“Energy continues to be a dynamic and growing market,” Chief Executive Officer Andrew S. Duff said in a conference call Tuesday. “We recognize that we’re stepping into a difficult part of the cycle, but the long-term prospects and fit is very appealing to us.”
http://www.bloomberg.com/news/articles/2015-11-17/piper-jaffray-to-acqu…
Hope they don't screw the firm up....
It will be interesting to see how S&C integrates given their boutique culture and ops
.
seems to me like it's a big win for PJC and Simmons partners.
PJC gets: - energy exposure (currently no energy coverage) - ability to acquire an energy focused bank when the industry is hurting (and therefore firms who focus exclusively on the hurting industry are also hurting) - major upside when energy recovers and SCI can get more deals, especially in capital markets
SCI gets: - ECM, DCM, private capital raising platform - SCI is traditionally weak on energy offerings (only co-manage roles due to lack of balance sheet) and we all know that capital markets makes moolah - partners get to cash out some now with liquid currency - who knows when they would ever realize their SCI holdings - unsure if this is a last resort deal or if it was totally unsolicited, but could be a lifeline due to lack of deal activity
culture wise, doesn't seem like much will change. SCI will run as SCI, just with PJC as majority shareholder instead of individuals. junior team may have to learn how to do capital markets offerings in addition to M&A, but who cares about junior resources?
Is it true in most acquisitions and mergers, there's a fair amount of employee attrition (through termination and voluntary)?
What's an industry wide average for this? I know it's extremely dependent on deal size, amount of integration, terms of the deal, etc, but just as an idea or number to talk about with business friends and human capital guys, what percentage of employees are normally no longer at the 'new' company.
I think it depends on the circumstances of the transaction and how the target will be integrated in addition to cultural fit. In this case it seems like employee attrition will be mitigated as Piper did not have an energy group before and the article states all the Simmons MDs have agreed to stay on.
During this transition who handles the integration of human capital? I know these types of companies probably don't have a huge HR department or CHRO, so do they use outside counsel or is it just a run with it kind of thing? I'm asking because I have a huge love of human capital/resources, culture, talent, etc and wanted to learn more about it.
Classic Prescott Moncrief!
Anyone know how Simmons is faring after the acquisition?
i have heard it is pretty rough from a cultural integration standpoint... Not surprising BC the feather in Simmons' cap was always great culture - very laid back. You add a less prestigious public acquirer to that and you're going to have people problems. Throw into the mix that Simmons is OFS-focused (i.e. the most challenged subvertical in an already-challenged vertical) and you have another layer of discord, i imagine.
I think it would have gone a lot smoother if the acquirer was another private advisory shop that just wanted to add energy.
MD's and Principals have had 100K and 50K salary reductions and no bonus for 2016... id say badly
I don't believe it was a distressed sale when it was agreed, even though it may look like it now.
Harum est aut ex aut est. Id et et aut aspernatur iste totam et. Debitis aut facilis eveniet tempora consequatur pariatur quas. Consequatur magni occaecati illo asperiores.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...