Houlihan Lokey Is Said in Advanced Talks to Buy Japan’s GCA for $500mm - $600mm
Houlihan Lokey Is Said in Advanced Talks to Buy Japan’s GCA
Read more at: https://www.bloombergquint.com/business/houlihan-lokey-is-said-in-advanced-talks-to-buy-japan-s-gca
Interesting. I think this does a lot for HL. $600MM is a big acquisition for a pure advisory shop. This gives them like 500 new employees and like 80 new MDs. + a way bigger presence in Asia
This is huge
Interesting. Thanks for sharing. Good luck to them on that deal
Huge
What does this mean for HL Tech? I would expect it's probably still a middle market player - below other SF groups like Barclays / DB / RBC / PWP.
According to their IP, tech is now HL's largest group. GCA was mostly a tech bank and did high quality deals. So this puts HL right up there with any MM tech group in the world. Still a notch below the BBs, but I don't really doubt that they'll grow to compete with the BBs on some deals.
Bump
FIG fellas - how do you value advisory focused nvestment banks?
EV/Revenue? P/E?
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.
Typically just an EBITDA or Revenue multiple. A lot advisory shop analysis is focused on:
Ratios you’d look at would be:
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:
So for example, this deal kind of helps with 1 and 3 primarily.
Usually valued on revenue multiples b/c the acquirer will assume their own compensation structure
Depending on size of target, deals can be pretty structured with a material percentage of deferred compensation in the form of retention/earnouts
Will be great for the tech industry
Any update on how they are getting along?
Quaerat autem enim ut quia. Officia ea autem delectus maxime sequi in est. Qui nihil qui at voluptas qui corporis qui totam. Dolores dolore et quae voluptas qui.
Minima quas et fuga nihil eius quam suscipit. Sit harum voluptatum tempore dolorum aperiam et repellendus.
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...