Mizuho agreed to purchase boutique investment bank Greenhill & Co for $550mn, betting on the struggling group’s ability to kick-start their ambitions in the US.
Greenhill, one of the first M&A advisor companies to sell shares publicly in 2004, has been facing an increasing number of competitors in recent years including Moelis Partners, PJT Partners, and Centerview Partners.
Mizuho will pay $15 per share for Greenhill. This is more than twice the closing price of Friday. Greenhill’s shares soared by almost 120 percent in the early hours of trading on Monday.
Mizuho has made a new acquisition to fulfill its ambitions of investment banking in the highly competitive US market.
Mizuho announced that Greenhill will be part of its existing banking division, and led by Michal Katz, the current head for banking in Americas. The Japanese group plans to keep Greenhill’s management and brand.
Scott Bok is the chairman and chief executive officer of Greenhill. He said, “Our firm pioneered the concept of a publicly traded independent investment banking, and this format served us for many years.”
We believe that our employees and clients will both benefit from the team joining a larger, more diverse financial institution.
Japanese investment bankers have stated that they expect the deteriorating US-China relations to encourage Japanese companies to sign more deals overseas.
Bankers predict that this trend will lead to more foreign acquisitions by Japanese companies.
Mizuho, however, is betting on a boutique M&A firm whose revenue in the first quarter fell to only $50mn as the economy slowed and the turmoil in the financial sector halted dealmaking.
Robert Greenhill founded the company in 1996. He was a former Morgan Stanley banker. The company offered its services to clients to help them avoid conflicts of interest when dealing with bulge bracket investment banks.
Greenhill, who is now in his 80s, continues to be the chair emeritus for the group.
Greenhill shares rose from $17.50 per share in 2004 to nearly $100 per share within five years. Greenhill’s growth slowed in the decade following the global financial crash as the competition to provide advice on deals increased.
This deal is part of a trend where Japan’s largest banks — Mizuho Financial Group, MUFG Financial Group and Sumitomo Mitsui Financial Group – are strengthening their investment banking capability.
MUFG and Morgan Stanley have been partners for 15 years. In April, SMFG announced that it would triple its stakes in Jefferies Investment Bank, extending a partnership which began in 2021.