FBR Capital Markets (Nasdaq: FBCM) has agreed to acquire Watch Hill Partners, a New York-based corporate advisory boutique founded in 2003. No financial terms were disclosed for the deal, which is expected to close in the third quarter.
FBR Capital Markets Corporation (Nasdaq: FBCM) (FBR Capital Markets), a leading investment bank serving the middle market, announced today that it has entered into a definitive agreement to acquire Watch Hill Partners LLC, a boutique corporate finance advisory practice based in New York. The Watch Hill Partners team will become part of the Corporate Advisory practice within FBR Capital Markets’ newly reorganized Investment Banking department.
Founded in 2003, Watch Hill Partners has provided mergers and acquisitions and corporate finance advisory services to a diverse range of clients including closely held and public companies, financial sponsors and a variety of other sophisticated investor groups. The senior partners of Watch Hill Partners have nearly 200 years of combined investment banking experience and have, in aggregate, advised on transactions valued at more than $100 billion.
“FBR Capital Markets has evolved significantly over the last year as we have made investments to strengthen our franchise and become a leading full-service investment bank serving the middle market,” said Richard J. Hendrix, President and Chief Executive Officer of FBR Capital Markets. “With the Watch Hill team and our newly added resources in Research, Institutional Brokerage and Convertible Securities along with new capabilities in Debt Origination, Credit Sales & Trading and Restructuring Finance & Advisory, we are assembling one of the most talented teams and compelling platforms in the industry today. We believe this will benefit our clients as they look to capitalize on the opportunities that the business environment will present over the next several years.”
David Knowlton, Managing Partner of Watch Hill Partners, said, “The investment banking landscape is in the midst of a dramatic evolution. And the premium today, as much as ever, is on long-standing relationships, experience through many business cycles and relentless client service. Confidentiality, creativity and being a trusted advisor is of paramount importance, and the integration with FBR Capital Markets will provide clients access to an expanded suite of services. The FBR Capital Markets franchise will become an even more powerful force in focusing on solutions for clients and achieving a broad range of new mandates.”
Widely regarded as a pioneer in middle market investment banking, Sandy Robertson, Founding Partner of Francisco Partners, Founder and former Chairman of Robertson Stephens & Company, commented, “Combining the capabilities of FBR Capital Markets and Watch Hill Partners will create a client-focused platform that I believe will be uniquely well-suited for this new era in investment banking.”
FBR Capital Markets also announced a reorganization of its Investment Banking department, which will be comprised of three primary practice areas. To complement its existing industry-focused team, the firm is integrating its Capital Markets group into Investment Banking and creating a third practice area, Corporate Advisory Services. The reorganization of Investment Banking into these three areas will create a seamless origination model for FBR Capital Markets’ full suite of corporate finance capabilities, including the firm’s new Convertible Securities, Restructuring Finance & Advisory Services and Credit Sales & Trading products.
In addition to continuing in his position of Executive Vice President and Head of Investment Banking, James C. Neuhauser, CFA, will now also serve as Chairman of the newly formed Investment Banking Management Committee. James R. Kleeblatt has been promoted to Vice Chairman of FBR Capital Markets & Co. and will continue to lead the Equity and Debt Capital Markets functions. David Knowlton will become Vice Chairman of Investment Banking and Head of the Corporate Advisory practice. Messrs. Kleeblatt and Knowlton will be joined by Kenneth P. Slosser, Senior Managing Director, Group Head of Financial Institutions and Joseph R. Nardini, Senior Managing Director, Group Head of Diversified Industrials as members of the Investment Banking Management Committee.
“The acquisition of Watch Hill Partners and the realignment of our banking practice are significant strategic steps for FBR,” said Mr. Neuhauser. “With the addition of these experienced and highly-regarded senior M&A and corporate finance professionals, this acquisition deepens our leadership team, broadens our expertise and enhances our presence in New York.”
Terms of the Watch Hill transaction, which is expected to close in the third quarter of 2009, were not disclosed. Watch Hill Partners was represented by Keefe, Bruyette & Woods and Herrick, Feinstein LLP.
About FBR Capital Markets Corporation
FBR Capital Markets Corporation (Nasdaq: FBCM) provides investment banking, merger and acquisition advisory, institutional brokerage and research services through its subsidiary FBR Capital Markets & Co. FBR Capital Markets focuses capital and financial expertise on seven industry sectors: consumer; diversified industrials; energy & natural resources; financial institutions; insurance; real estate; and technology, media & telecom. Asset management services are provided by FBR Investment Management, Inc., and mutual funds are provided by FBR Fund Advisers, Inc.; both companies are subsidiaries of FBR Capital Markets Corporation. FBR Capital Markets is headquartered in the Washington, D.C. metropolitan area with offices throughout the United States and in London. For more information, please visit www.fbrcapitalmarkets.com.
About Watch Hill Partners LLC
Watch Hill Partners is a boutique investment bank providing senior-level M&A and corporate finance advisory services to corporations as well as financial sponsors and their portfolio companies. The hallmarks of our service — confidentiality, creativity, experience, objectivity and unrelenting focus — help our clients realize their respective strategic visions.