Mid-market U.S. brokerage house, Piper Jaffray Companies, announced the expansion of its Asian operations, with its definitive agreement to acquire Goldbond Capital Holdings Ltd., a Hong Kong-based investment bank, for approximately $50 million.
The deal will be paid approximately 90% in cash and 10% in stock. The transaction is expected to close in the third quarter, subject to customary regulatory approvals. It is expected to be modestly accretive in 2008.
Piper Jaffray says that with this acquisition, it gains capital markets capabilities in Hong Kong that, further its mission of building the leading, international middle market investment bank and institutional securities firm.
“Hong Kong is a major center of institutional capital raising and securities trading internationally,” said Andrew Duff, chairman and chief executive officer of Piper Jaffray. “In order to serve as the primary financial advisor to middle market companies in Greater China, we need to provide access to capital in Hong Kong as well as in the United States and Europe. Likewise, we want to offer top-quality growth investment opportunities to our Asian-based buy-side clients.”
Founded in 2003 by chairman and CEO Alex Ko, Goldbond focuses primarily on raising capital for and providing financial advisory services to companies listed or to be listed on the Hong Kong Stock Exchange. It has corporate finance, sales and trading, equity capital markets, and research capabilities. These capabilities will be combined with the existing Piper Jaffray operations in China.
Ko, who previously headed up the corporate finance business at BNP Paribas Peregrine Capital Ltd. in Asia, will report to Tom Schnettler, vice chairman and chief financial officer of Piper Jaffray. The current Goldbond management team combined with the existing Piper Jaffray Shanghai leadership will lead the combined growth platform in Asia.
“In a relatively short time, Alex Ko and his team have developed the capital markets capabilities that we require to expand our successful business in Asia,” Schnettler said. “With this combination, we can provide global access to capital for both Piper Jaffray and Goldbond clients. In addition, Goldbond’s clients will benefit from our stronger capital base and broader product set.”
“Piper Jaffray shares our commitment to delivering exceptional service to clients and our focus on middle market companies,” said Ko. “We look forward to expanding our client relationships with our new partnership.”
Goldbond has approximately 70 employees. Its primary office will remain in Hong Kong. Goldbond also has offices in Shanghai and Beijing.