Daiwa division to pay £75m for Close Brothers Corporate Finance

The acquisition of Close Brothers Corporate Finance by the European subsidiary of Japanese investment bank Daiwa Securities SMBC will give the bank access to and presence in European markets.

Daiwa Securities SMBC Europe is acquiring Close Brothers Corporate Finance from UK bank Close Brothers Group for a cash consideration of £75 million ($115 million; €85 million), subject to regulatory approval.

Close Brothers Corporate Finance provides corporate finance advice in mergers and acquisitions, restructuring, debt advisory, financial sponsors coverage, pensions advisory and initial public offering advisory. Its clients include private equity firms such as Graphite Capital, HgCapital and Phoenix Equity Partners. Headquartered in London, the firm has offices across Manchester, Paris, Lyon, Barcelona, Frankfurt and Zurich.

The acquisition gives Daiwa Securities SMBC Europe a standalone European corporate finance advisory business, which will increase locally originated European business and revenues. It also diversifies the firm’s earning streams, which have largely been commission-driven to date, Eishu Kosuge, chairman and chief executive officer of Daiwa SMBC Europe, said in a statement.

Close Brothers Corporate Finance will work with Daiwa Securities SMBC’s other international corporate finance operations and will continue to provide independent corporate finance advice. Close Brothers Corporate Finance will continue to trade under its existing name for up to 12 months.

Stephen Aulsebrook, chief executive of Close Brothers Corporate Finance will report to Ikuo Mori, who becomes chairman of the firm upon completion of the deal. Previously, Mori was a senior managing director and head of international operations at Daiwa Securities SMBC and a director of its parent Daiwa Securities Group.

This month, Daiwa Securities Group launched a ¥3.4 billion ($35 million; €26 million) tender offer to acquire a 53.2 percent stake in Daiwa SMBC Capital, a listed principal investment firm. Daiwa currently owns a 46.8 percent stake in Daiwa SMBC Capital and intends to de-list the firm after acquiring the remaining stake.

In March, Daiwa Securities SMBC Principal Investments, the investment arm of Daiwa Securities SMBC and advisory firm Quantum Leaps formed Daiwa Quantum Capital, a joint venture. Quantum Capital intends to raise a ¥30 billion private equity fund focused on investments in Asian tech companies.

Daiwa Securities abandoned plants to raise a ¥500 billion private equity fund in partnership with The Blackstone Group in January, citing a difficult fundraising environment.

Daiwa Securities SMBC is an investment banking joint venture between Daiwa Securities and the Sumitomo Mitsui Banking Corporation. The firm invests in non-performing loans, real estate, clean technology and private equity.