Piper Jaffray Companies(NYSE: PJC), a leading investment bank and asset management firm, today announced that it has reached a definitive agreement to acquire 100% ofWeeden & Co., L.P.(Weeden & Co.), a broker-dealer focused on providing institutional clients with premier execution services. Upon closing,Weeden & Co.will convert to and operate asPiper Jaffray & Co.
Founded in 1922,Weeden & Co.provides premier global trading solutions, specializing in best execution through the use of high-touch and program trading, proprietary algorithmic strategies and derivatives. Headquartered inGreenwich, Conn., the firm also has offices inNew York,Boston,ChicagoandSan Francisco.Weeden & Co.is a longstanding leader across multiple equity trading categories, with recognition for 15 consecutive years from Greenwich Associates survey of the largest sell-side portfolio trading desks.
The acquisition will significantly strengthen Piper Jaffrays position as a top institutional equities trading platform, diversifying and expanding its client base while adding best in class execution capabilities and proprietary technology. The transaction will complement Weeden & Co.s existing business, through Piper Jaffrays added research and equity capital markets capabilities. Together, both firms will be more competitively positioned to add long-term value for clients.
Todays announcement represents an exciting and important step forward, saidDeb Schoneman, president ofPiper Jaffray. As our investing clients unbundle how they access and evaluate research and best execution, we continue to strengthen our equities offerings.Weeden & Co.brings an immediate leadership position in equity trading that makes Piper Jaffrays platform far more robust and relevant, while adding resilience across market cycles.
The combined trading platform will be led by Weeden & Co.s current CEO,Lance Lonergan, who will joinPiper Jaffrayas the firms head of global equity execution.
Lonergancommented, This transformative combination of two market-leading equity franchises broadens distribution for capital markets and investment advice, while deepening our liquidity pool.Piper Jaffrayis an ideal partner to expand our offerings with its highly regarded research and capital markets platform.
Weeden & Co. is a firm we have long respected and admired for its talented team and best-in-class trade execution, addedTom OKane, co-head of global equities atPiper Jaffray. We look forward to combining our broader product suite with Weeden & Co.s trading expertise and technologies, and more importantly, bringing together two firms that share a similar vision and culture.
Transaction Overview
Piper Jaffraywill acquire 100% ofWeeden & Co., L.P.Prior to closing,Weeden & Co.will distribute 100% of excess capital to its shareholders. The total upfront consideration is$42 million, consisting of$24.5 millionin cash and$17.5 millionin restricted cash and retention stock. There is an earn-out opportunity of up to$31.5 millionbased on combined non-deal equity sales and trading revenue. The retention consideration includes non-compete and non-solicitation agreements.Key Weeden & Co.professionals have entered into employment agreements withPiper Jaffraythat become effective concurrent with the transactions close. For a copy of the investor deck, please visit piperjaffray.com/weeden2019.
In this transaction,Piper Jaffray Companieswill acquireWeeden & Co., L.P., an execution broker-dealer for institutional clients. The sale does not include the holding companyWeeden Investors, L.P.,Weeden Primeor any of its other affiliates.
Finn Dixon & Herling LLPis serving as legal advisor toWeeden & Co.andFaegre Baker Daniels LLPis serving as legal advisor toPiper Jaffrayin connection to the transaction. The transaction is subject to customary closing conditions and expected to close inJune 2019.
