Boutique investment bank Houlihan Lokey priced its initial
public offering at $21 a share, below expectations, according to a
person familiar with the offering.
The deal raised $220.5 million by selling 10.5 million shares,
according to the person. That total doesn't count a so-called
overallotment option, which gives underwriters the opportunity to
sell additional shares under certain circumstances.
Shareholders of the boutique investment bank -- which include
Orix USA, the U.S. arm of Japanese investment conglomerate Orix
Corp., and company executives and directors -- had planned to sell
13.1 million shares at $22 to $24 apiece, according to regulatory
filings.
The IPO for the Los Angeles-based independent adviser comes amid
increasing demand for independent advice on mergers and
acquisitions. This year, global mergers and acquisitions are on
pace to hit the highest level on record.
Houlihan Lokey makes money by advising companies on mergers and
acquisitions and other transactions as well as by advising
companies on bankruptcies and restructuring and giving fairness
opinions in connection with mergers and other transactions.
At its IPO price, Houlihan Lokey has a market value of about
$1.4 billion. That compares to a $1.7 billion market-capitalization
of fellow boutique investment bank and independent adviser Moelis
& Co., according to FactSet. Moelis & Co. went public in
2014.
Houlihan Lokey's IPO follows some recent trading stumbles by
newly listed companies.
The average one-day pops for U.S.-listed IPOs is 6.7% for the
companies that made their debut in August, according to Dealogic.
That is below the average 15% rise for 2015 and is down from 16%
for companies that went public in July, according to Dealogic.
Last week, several high-profile companies had disappointing
stock-trading debuts. Amplify Snack Brands Inc. and Sunrun Inc.
tumbled in their first sessions of trading a week ago. Amplify's
10% fall came after it priced above its range, signaling a warning
to big-name consumer brands preparing to go public. Also last week,
shares of budget fitness chain Planet Fitness Inc. spent most of
the day in the red during their highly anticipated debut before
closing the day flat.
Houlihan Lokey is set to begin trading Thursday on the New York
Stock Exchange under the symbol "HLI." The deal is being led by
Bank of America Merrill Lynch and Goldman Sachs.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
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