Piper Jaffray to acquire Sandler O'Neill, new firm named Piper Sandler Companies
Piper Jaffray and Sandler O'Neill + Partners, L.P. announced they have entered into a definitive merger agreement. The combined company will be named Piper Sandler Companies and will bring together the leading investment banking firm focused on the financial services industry with the growing Piper Jaffray investment banking platform. The combination accelerates Piper Jaffray's goal of prioritizing and building its M&A advisory business, adds a differentiated fixed income business and significantly expands the breadth and depth of the firm's equity research, and sales and trading franchise. Under the terms of the merger agreement, Piper Jaffray will acquire 100% of the equity and partnership interests in Sandler O'Neill. The transaction consideration will total $485M, which is based on $100M of tangible book value on the Sandler O'Neill balance sheet delivered at the time of closing. Piper Jaffray will pay $350M in cash to Sandler O'Neill equity holders at the time of closing; and $135M in restricted consideration, primarily in restricted stock of Piper Jaffray Companies, to Sandler O'Neill employee partners. In addition, Piper Jaffray agreed to provide $115M in long-term retention incentives, primarily in restricted stock of Piper Jaffray Companies, to Sandler O'Neill employees. All Sandler O'Neill partners have entered into employment agreements in connection with the transaction. The merger nearly doubles revenues for the Piper Jaffray fixed income business. Following the merger, Jimmy Dunne, senior managing principal at Sandler O'Neill, will be named vice chairman of Piper Sandler and senior managing principal of Piper Sandler's financial services business. Dunne will continue to focus on exactly the same work that he has been doing for the past several years, providing guidance and strategic advice to clients on M&A deals and other transactions. Jon Doyle, senior managing principal at Sandler O'Neill, will lead Piper Sandler's financial services business line and all investment banking, capital markets, fixed income and equities resources dedicated to the financial services industry will report to him. Doyle will be named vice chairman, senior managing principal and head of the financial services group of Piper Sandler. Doyle will also join the board of directors of Piper Sandler Companies, as well as the firm's leadership team. Existing Piper Jaffray investment banking, capital markets, fixed income and equities personnel dedicated to the financial services sector will be combined with the Sandler O'Neill team. The transaction is expected to close in January 2020 and is subject to obtaining required regulatory approvals and other customary closing conditions.