Shares of Houlihan Lokey Inc. rose in their trading debut
Thursday, a day after the boutique investment bank priced its
smaller-than-planned initial public offering below
expectations.
The IPO for Houlihan Lokey sold fewer shares than planned at a
lower price than anticipated. It raised $220.5 million for selling
shareholders, which included Orix USA, the U.S. arm of Japanese
investment conglomerate Orix Corp., and company executives and
directors. They sold 10.5 million shares at $21 apiece. They had
planned to sell 13.1 million shares at $22 to $24 apiece, according
to regulatory filings.
Houlihan Lokey's stock opened trading on the New York Stock
Exchange under the symbol "HLI" at $22.75, 8.3% above its IPO
price.
The deal was led by Bank of America Merrill Lynch and Goldman
Sachs.
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.
Its IPO comes amid increasing demand for advice on mergers and
acquisitions. This year, global mergers and acquisitions are on
pace to hit the highest level on record.
In recent trading Houlihan Lokey's stock rose 9% to $22.88. It
follows a string of 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 there were several high-profile stumbles, including a
big first-day fall by consumer brand Amplify Snack Brands Inc.,
which had priced above expectations. Separately, Planet Fitness
Inc.'s stock spent most of its first day of trading in the red
before closing the day flat.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
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