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Moelis seeks $1.58-billion valuation in IPO

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Boutique Los Angeles investment bank Moelis & Co. is seeking a valuation of as much as $1.58 billion in its initial public offering.

Moelis may raise as much as $243.5 million by selling 8.4 million shares for $26 to $29 each, according to a regulatory filing Friday. At the top of the range, the company would have a market value of $1.58 billion, the filing shows.

Ken Moelis, 55, and his partners are planning to capitalize on the Century City-based company's growth and a rebound in the pace of mergers and acquisitions worldwide. About $141 million of the proceeds will be used to make payments to partners, and the IPO is structured so that Moelis will maintain control with 97% of the combined voting power in the firm, the filing shows.

"Now is probably a good time to be a seller into the IPO market," said Peter Nesvold, a managing director at merger advisory firm Silver Lane Advisors in New York. Having a publicly traded stock will help Moelis pay and keep its top bankers, he said.

With U.S. stock benchmarks at record highs, investors are snapping up new stocks.

The IPO price is expected to be set April 15.

Moelis, who left UBS to start his firm — drawing on a list of clients gathered while also working at Drexel Burnham Lambert Inc. and Donaldson Lufkin & Jenrette — is joining a small group of Wall Street deal makers who have cashed in on their success by taking their firms public. Evercore Partners Inc., the firm co-founded by former U.S. Deputy Treasury Secretary Roger Altman, raised $83 million in August 2006 and Robert Greenhill's Greenhill & Co. conducted a share sale in May 2004.

At the $1.58-billion valuation, Moelis is seeking almost 23 times 2013 earnings of $70.2 million.

"The demand for financial IPOs hasn't been very strong," said Josef Schuster, founder of Chicago-based IPOX Schuster. "Moelis' valuation reflects the increased competition and limited growth opportunity in investment banking today."

Moelis ranked 12th among merger advisors in 2013, its highest ever position, after advising companies such as HJ Heinz Co. on $134 billion in transactions last year, according to data compiled by Bloomberg. Among advisors of deals this year, Moelis ranks 40th, the data show.

Companies have announced $668 billion of acquisitions so far this year, 28% more than a year ago, data compiled by Bloomberg show.

Moelis has applied to list its shares on the New York Stock Exchange.

Copyright © 2014, Los Angeles Times
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