Houlihan Lokey declares bid for Japanese M&A consultancy GCA
TOKYO – US investment bank Houlihan Lokey announced Tuesday that it would acquire Tokyo-based merger and acquisition consultancy GCA for 68 billion yen ($ 622 million). Houlihan said it would make a takeover bid to make GCA a wholly-owned subsidiary with an offer price of 1,380 yen per share – a 31% premium on the share price of GCA stock listed in Tokyo on Monday.
Nikkei reported on the deal on Monday.
The investment bank is trying to capitalize on GCA’s deep ties with Japan in anticipation of a post-pandemic transaction wave.
The acquisition under New York-listed Houlihan would give GCA more opportunities to provide advisory services to Japanese companies seeking to do business in the United States
Houlihan plans to finalize the tender offer by the end of this year, with the two companies expected to be integrated in 2022. GCA is expected to be delisted from the Tokyo Stock Exchange thereafter.
Founded in 2004 by bankers Nobuo Sayama and Akihiro Watanabe, GCA is particularly strong in technology fields such as semiconductors and software.
The company recently advised Panasonic on the sale of a US lighting company and was involved in the recent acquisition of the Tokyo Dome by developer Mitsui Fudosan. It debuted on the first section of the Tokyo Stock Exchange in 2012.
Nobuo Sayama, far left, and Akihiro Watanabe, second from left – here in 2007 – were the founders of the Japanese M&A consultancy GCA.
Houlihan was founded in 1972 and has a strong position in medium-sized M&A deals. The company advised on more M&A deals in the US than any other company over the past year, and its market cap of more than $ 6 billion makes it more valuable than rival boutique advisory firms like Lazard and Evercore.
The acquisition of GCA would strengthen the American company’s technology-related business and enable it to better advise Japanese customers.
Houlihan’s shares rose nearly 1% on Monday to close at $ 89.96.
The latter is a growing market. Japan saw a record number of deals in the first half of 2021, according to data from Tokyo-based M&A advisory firm Recof. Trends such as moving away from CO2-intensive operations are putting companies under pressure to rethink their business models, and many industries are in the process of consolidation.
While a number of Japanese firms are considering transacting overseas, there are limits to the support that Japan-based independent advisory firms outside the country can provide.
