Houlihan Lokey to Be Acquired by Japan’s Orix
Los Angeles-based investment banking firm Houlihan Lokey Howard & Zukin said Sunday that it had agreed to be acquired by Orix Corp. of Japan for $500 million in cash and stock.
Orix, based in Tokyo, operates a range of businesses including financial services, aircraft leasing and a Japanese professional baseball team.
Under terms of the agreement, which is expected to close in the first quarter of 2006, a new holding company would combine Houlihan Lokey with Orix USA, the U.S. corporate lending operations of Orix.
Orix USA would own about 70% of the holding company, with current shareholders of Houlihan Lokey owning the remaining 30%. The new entity would initially have about $2.5 billion in total assets and about 800 employees in 10 offices in the United States and Europe, the companies said.
Houlihan Lokey and Orix USA would continue to operate independently under their own names.
Houlihan co-Chief Executive Jeff Werbalowsky, said Sunday that the deal would allow his firm to expand into Asia and “truly provide a worldwide presence to our clients.”
In addition, he said, Houlihan would also “have a corporation very closely allied with us that we can call upon for our clients ... to provide the capital in the middle market.”
Christopher Smith, managing director of Orix’s corporate finance group, said Orix would gain “the ability to touch a lot more customers” in the U.S. market by joining together advisory services and capital in one business. “That’s a trend we’ve seen and will continue,” he said.
Founded in 1970, Houlihan Lokey supplies a range of investment banking services including mergers and acquisitions, financing, financial opinions and advisory services and financial restructuring.
The firm, headquartered in Century City, focuses on companies with market values up to $500 million and is a top provider of fairness opinions.
Houlihan recently served as financial advisor to the Mammoth Mountain Ski Area in the $365-million sale, announced this month, of a controlling interest in its eastern Sierra holdings to Starwood Capital Group.
Orix, a publicly traded corporation, was established in 1964 and provides financial services to corporate and retail customers including leases, loans, life insurance and investment banking.