Piper Jaffray Companies Announces Sale of Advisory Research, Inc.
29 May 2019 - 8:55PM
Business Wire
Piper Jaffray Companies (NYSE: PJC), a leading investment bank,
today announced the sale of Advisory Research, Inc. through two
separate transactions which will result in the firm exiting its
traditional asset management business. It has signed a definitive
agreement to sell the midstream energy business of Advisory
Research, Inc. to Tortoise Capital Advisors. Piper Jaffray has also
entered into a letter of intent to sell the remaining Advisory
Research business to a partner group led by Matthew Swaim, managing
director and executive committee chairman at Advisory Research.
Piper Jaffray expects to generate net cash proceeds from these two
transactions of approximately $60-70 million, exclusive of
potential earn-out proceeds.
“Tortoise has built an excellent investment management platform
focused on essential assets,” commented Deb Schoneman, president of
Piper Jaffray. “The Advisory Research energy infrastructure
investment team will continue to bring their deep expertise and
strong investment process to existing clients, while leveraging
Tortoise’s knowledge in investing across the energy value chain. In
addition, Tortoise will bring expanded distribution and product
capabilities to enhance growth potential.”
Commenting on the sale, Tortoise Chief Executive Officer, Kevin
Birzer said, “We are thrilled for the experienced Advisory Research
energy infrastructure team to join Tortoise. Bringing together two
of the longest tenured midstream energy teams will create an even
stronger and deeper combined team.”
The remaining Advisory Research teams, based in Chicago, will
continue to manage their existing products and client assets.
“Without significant investment, the business lacks the potential
to scale to a level that will represent a meaningful part of Piper
Jaffray’s overall business mix,” said Schoneman. “We are confident
that Matt and his partners will continue to provide excellent
stewardship of these client assets by providing exceptional
investment results and client service to their client base.”
Commenting on the sale, ARI Executive Committee Chairman,
Matthew Swaim said, “With our long-tenured, focused investment
teams executing in areas of the market that require unique
expertise, we are thrilled to return the ARI business to its legacy
partnership roots. We will continue to invest in premier investment
talent, maintain our intense focus on client success and grow our
niche investment strategies with like-minded clients.”
Piper Jaffray acquired Advisory Research in 2010. Since that
time, the asset management industry has continued to evolve in
terms of product availability and distribution capabilities. During
this same timeframe, Piper Jaffray significantly scaled its banking
platforms to become a market leader in its areas of focus, creating
enhanced financial performance and shareholder returns. These two
factors combined led to the decision to pursue a sale. Advisory
Research currently represents approximately 5% of Piper Jaffray’s
adjusted net revenue.
“These transactions sharpen our focus with respect to core
strengths,” commented Chad Abraham, chief executive officer of
Piper Jaffray. “We intend to reinvest the capital from this sale in
our core areas of expertise through both organic investments and
corporate development activity in order to generate higher returns
for our shareholders.”
The transactions are expected to close in the second half of
2019 and are subject to customary regulatory and closing
conditions, including client consents. The earn-out provisions of
the Tortoise transaction provide additional potential consideration
based on year one results. Faegre Baker Daniels LLP is serving as
legal advisor and Ardea Partners is serving as the exclusive
financial advisor in connection with these transactions.
About Piper JaffrayPiper Jaffray is a leading investment
bank and institutional securities firm driven to help clients
Realize the Power of Partnership®. Through a distinct combination
of candid counsel, focused expertise and empowered employees, we
deliver insight and impact to each and every relationship. Our
proven advisory teams combine deep product and sector expertise
with ready access to global capital. Founded in 1895, the firm is
headquartered in Minneapolis with offices across the United States
and in Hong Kong, Aberdeen and London. www.piperjaffray.com
About Advisory Research, Inc.With more than $6 billion in
assets under management, Advisory Research, Inc. is a diversified
investment manager that provides a broad spectrum of traditional
and alternative investments, including value oriented U.S.,
international and global, as well as MLP & energy
infrastructure strategies to leading institutions.
About TortoiseTortoise invests in essential assets –
those assets and services that are indispensable to the economy and
society. Tortoise’s solid track record of energy value chain
investment experience and research dates back more than 15 years.
Tortoise’s infrastructure expertise includes midstream energy,
renewables and water. With a steady wins approach and a long-term
perspective, Tortoise strives to make a positive impact on clients
and communities. To learn more, please visit
www.tortoiseadvisors.com.
Cautionary Note Regarding Forward-Looking InformationThis
announcement contains forward-looking statements. Statements that
are not historical or current facts, including statements about
beliefs and expectations, are forward-looking statements. These
forward-looking statements cover, among other things, expectations
regarding the closing of the planned divestitures and the timing of
these closings, the intended uses of the proceeds from these
divestitures and the results of these intended uses.
Forward-looking statements involve inherent risks and
uncertainties, and important factors could cause actual results to
differ materially from those anticipated, including the following:
(1) closing of the divestitures described in this announcement is
subject to client consents and other regulatory closing conditions
and may not close on the expected timing or at all; (2) the
expected use of proceeds may not be carried out or may not yield
the expected results; (3) other factors identified under “Risk
Factors” in Part I, Item 1A of our Annual Report on Form 10-K for
the year ended December 31, 2018, and updated in our subsequent
reports filed with the SEC. These reports are available at
www.piperjaffray.com or www.sec.gov. Forward-looking statements
speak only as of the date they are made, and we undertake no
obligation to update them in light of new information or future
events.
Piper Jaffray Companies (NYSE: PJC) is a leading investment bank
and institutional securities firm driven to help clients Realize
the Power of Partnership®. Securities brokerage and investment
banking services are offered in the U.S. through Piper Jaffray
& Co., member SIPC and FINRA; in Europe through Piper Jaffray
Ltd., authorized and regulated by the U.K. Financial Conduct
Authority; and in Hong Kong through Piper Jaffray Hong Kong
Limited, authorized and regulated by the Securities and Futures
Commission. Asset management products and services are offered
through five separate investment advisory affiliates―U.S.
Securities and Exchange Commission (SEC) registered Advisory
Research, Inc., Piper Jaffray Investment Management LLC, PJC
Capital Partners LLC and Piper Jaffray & Co., and
Guernsey-based Parallel General Partners Limited, authorized and
regulated by the Guernsey Financial Services Commission.
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© 2019 Piper Jaffray Companies. 800 Nicollet Mall, Suite 1000,
Minneapolis, Minnesota 55402-7036
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Tim CarterChief Financial OfficerTel: 612
303-5607timothy.l.carter@pjc.com
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