Minneapolis-based investment bank and asset-management firm Piper Jaffray announced on Tuesday that it is buying 100% of Houston-based Simmons & Co. Inc. for approximately US$91 million in cash and US$48 million in restricted stock.
Simmons, which was founded in 1974, is among the largest independent investment banks specializing in the energy industry. In addition to providing mergers and acquisition advice, capital markets execution and investment research, the firm also manages two private equity funds in the U.K. that specialize in the energy sector.
Piper Jaffray has also committed an additional US$21 million in cash and stock for retention purposes, it says, which may be paid to certain individuals, subject to revenue thresholds during the first three years following the deal. The transaction is subject to regulatory approval and customary closing conditions and expected to close in the first quarter of 2016.
Piper Jaffray intends to operate the business under the Simmons brand and it will continue to run its energy practice from Simmons’ Houston and Aberdeen locations. The business will be integrated into Piper Jaffray’s equities and investment banking group.
“Simmons is the pre-eminent firm in energy investment banking and we are proud to have the opportunity to partner with such an accomplished team. This addition represents a major step in our drive toward $500 million in annual investment-banking revenue,” says Andrew Duff, chairman and CEO of Piper Jaffray, in a statement.
“Our clients will greatly benefit from the enhanced breadth of products and capabilities that Piper brings to the table,” adds Michael Frazier, chairman, president and CEO of Simmons.