Houlihan Lokey Is Said in Advanced Talks to Buy Japan’s GCA for $500mm - $600mm

 
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Not actually a FIG guy but if they don't lend then you can value them the same way as a normal company. Relevant revenue driver is probably banker count or MD count and then you can adjust for dealmaking environment.

 
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Typically just an EBITDA or Revenue multiple. A lot advisory shop analysis is focused on:

  • Number of deals
  • Number of bankers
  • Advisory fee sizes
  • Close rates

Ratios you’d look at would be:

  • Non-Compensation Ratio: (overhead, excluding comp, as a % of revenue)
  • Compensation Ratio: (Compensation related expenses as a % of revenue)

Since firms like HL doesn’t have assets under management, or a balance sheet with funding coming from investors/deposits, it’s not too complicated, like you mentioned.

Growth mainly comes from 3 places:

  1. Hiring more MDs
  1. Working on bigger deals
  1. Growing coverage geographically or by industry

So for example, this deal kind of helps with 1 and 3 primarily.

 

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