Piper Jaffray Companies (NYSE: PJC), an investment bank and asset management firm, has reached a definitive agreement to acquire Simmons & Co. International. The transaction is expected to close in the first quarter of 2016.
Founded in 1974, Simmons is one of the largest independent investment banks specializing in the energy industry, offering mergers and acquisitions (M&A) advisory, capital markets execution, and investment research. With over 170 investment banking, sales and trading, equity research, and private equity professionals, the firm’s range of coverage spans the entire energy spectrum, including energy services and equipment, exploration and production, midstream, and downstream.
Simmons also manages two private equity funds in the UK that specialize in energy. Headquartered in Houston, the firm also has a major presence Aberdeen, as well as offices in London and Dubai.
Piper Jaffray will acquire 100% of Simmons for a total consideration of $139 million, consisting of $91 million in cash and $48 million in restricted stock. Also, Piper Jaffray has committed an additional $21 million in cash and stock for retention purposes. The restricted stock included in the total consideration includes non-compete and non-solicitation agreements. Additional compensation may be available to certain individuals subject to exceeding certain revenue thresholds during the first three years that Simmons is a part of Piper Jaffray. Key Simmons professionals have entered into employment agreements with Piper Jaffray that become effective concurrent with the transaction’s close.
Piper Jaffray intends to operate the business under the Simmons brand as a Piper Jaffray company and it will continue to run its energy practice from Simmons’ Houston and Aberdeen locations. The business will be integrated into Piper Jaffray’s equities and investment banking group, with senior leaders at the firm assuming senior leadership roles with Piper Jaffray.
Fred Charlton will be appointed chairman of energy investment banking and will serve as co-head of energy investment banking together with James Baker. Bill Herbert will become head of global energy research, and Will Britt will continue to lead specialized energy equity sales. Ira Green will become head of energy capital markets, and Colin Welsh will become head of international energy investment banking and executive chairman of Piper Jaffray’s UK subsidiary and will continue to lead Simmons’ international activities. Michael Frazier, Simmons’ chairman, president, and CEO, has entered into a consulting agreement with Piper Jaffray and will continue to serve in a senior role that leverages his relationship and experience.
Norton Rose Fulbright US LLP and Burness Paull LLP are serving as legal advisors, and Berkshire Capital Securities LLC is serving as financial advisor to Simmons in connection to the transaction. Faegre Baker Daniels LLP is serving as legal advisor to Piper Jaffray.