Piper Jaffray Is Acquiring Sandler O’Neill For $485 Million

By Amit Chowdhry ● July 10, 2019
  • Piper Jaffray announced it is acquiring Sandler O’Neill & Partners for $485 million
  • Going forward, the combined companies will be called Piper Sandler Companies

U.S. investment bank and financial services company Piper Jaffray is acquiring Sandler O’Neill & Partners for $485 million.  And Sandler O’Neill & Partners is a full-service investment banking firm and broker-dealer specializing in the financial services sector. Going forward, the combined company will be called Piper Sandler Companies. As part of the deal, Piper Jaffray is acquiring 100% of the equity and partnership interests in Sandler O’Neill.

This combination accelerates Piper’s goal of prioritizing and building its M&A advisor business and adds a differentiated fixed income business and significantly expands the breadth and depth of the research, sales, and trade-in franchise.

Piper Jaffray is paying $350 million in cash and an additional $135 million in restricted consideration, mostly in Piper Jaffray stock. This deal is expected to close in January.

“Transactions in investment banking are always about the people and culture. We have a long history with Sandler O’Neill. We admire the quality of their professionals, the business they have built and the culture of the firm which is based on many values we share,” said Piper Jaffray CEO Chad Abraham in a statement. “Piper Jaffray is very focused on competing in market sectors where we can be a market leader and leverage our specific expertise. 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. This transaction strengthens, diversifies and accelerates the growth of the Piper Jaffray investment banking, capital markets, and institutional distribution businesses.”

Abraham is going to continue heading up the combined company. And Jimmy Dunne — Senior Managing Principal at Sandler O’Neill — is going to become Piper Sandler’s vice chairman and senior managing principal of the financial services business.

“We are excited to combine with Piper Jaffray and build on the strength of both of our businesses,” added Dunne. “We truly believe this is the best fit and best opportunity for Sandler O’Neill and our clients. I’m extremely proud of what we have built over the past 30 years and thrilled to have found a partner that shares our passion for the business. I’m committed to the future of the firm and looking forward to all we can accomplish together for our clients.”

And Sandler O’Neill Senior Managing Principal Jon Doyle is going to be named vice chairman, senior managing principal, and head of the financial services group of Piper Sandler.

“I’m excited to be leading the expanded financial services practice at Piper Sandler and joining the board of directors,” explained Doyle. “We believe, in partnership, we will leverage our talent and expertise to enhance our combined capabilities. With Piper Jaffray’s scale and our shared vision, we look forward to growing our business for the future.”

The merger with Sandler O’Neill is expected to nearly double Piper Jaffray’s fixed income business revenues. And this deal will increase Piper Jaffray’s operating margin, ROE, and employee productivity metrics.