Piper Jaffray agrees to buy Sandler O'Neill for $485 million

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  • Piper Jaffray has agreed to pay $US485 million for Sandler O’Neill & Partners in an effort to boost its merger-advisory and fixed-income businesses.
  • The combined company will be named Piper Sandler Companies, with Piper Jaffray acquiring 100% of the equity and partnership interests in Sandler O’Neill.
  • Share of Piper Jaffray fell as much as 1.5% before the opening bell on Tuesday.
  • Watch Piper Jaffray trade live.

Two smaller Wall Street firms are joining forces.

Piper Jaffray is shelling out $US485 million for full-service investment bank Sandler O’Neill, according to a statement from the firm. The combined entity will be called Piper Sandler Companies.

The goal of the merger is to strengthen the bank’s merger-advisory and fixed-income businesses. The new company will also have an expanded equity research operation.

Piper Jaffray will pay $US350 million in cash and an additional $US135 million in restricted consideration, mostly in restricted Piper Jaffray stock. The deal is expected to close in January.

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“Piper Jaffray is very focused on competing in market sectors where we can be a market leader and leverage our specific expertise,” Chad Abraham, the CEO of Piper Jaffray, said in the statement. “With Sandler O’Neill, we start with the market leader and could not be positioned better to compete in the financial services sector over time.”

He continued: “This transaction strengthens, diversifies and accelerates the growth of the Piper Jaffray investment banking, capital markets and institutional distribution businesses.”

Piper Jaffray was up 12% year-to-date through Monday.

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