Houlihan Lokey buys debt boutique(4)

Houlihan Lokey, the boutique investment bank, has boosted its debt advisory business in Europe by buying Blenheim Advisors, which will work with the firm's restructuring unit if the credit crunch turns into an economic downturn.

Houlihan Lokey, a boutique investment bank, has acquired Blenheim Advisors, a European leveraged debt advisory firm for an undisclosed sum.

Founded in 2003, Blenheim Advisors provides advice to financial sponsors and their portfolio companies in Europe. 

As part of the acquisition, William Allen and Jonathan Guise, the founders of Blenheim Advisors, have joined as managing directors and will be joint heads of European debt advisory.

Guise said the transaction was conventionally structured, with an upfront consideration and an earn-out clause.

Guise told PEO: “It was a bit early to sell, but we didn't plan it, you can't with a business like this. We had a few approaches, but none suitable. Houlihan are an entrepreneurial bunch, who said they'd back us to grow our business without interference.”

He said in terms of Blenheim's clients they would now be able to access a world-class debt restructuring outfit. “Do they need that immediately, not necessarily, but in time? No question. We are at a point in the cycle where it can only go one way. Who knows when it will turn. At the moment it is liquidity and not defaults that is the problem,” he said.

He said debt structures had returned to those of a couple of years ago: an increased A loan in a traditional A, B, C structure with reduced covenant head room. Second lien has gone and the debt was amortising rather than back-ended. He said: “It is back to more responsible lending.

Joining Allen and Guise from Blenheim Advisors are four senior professionals: Samer Cortas and David Parker join as directors, Romain Cattet as vice president, and Romain Lainer as associate. 

Allen and Guise were previously executive directors in the leveraged finance team of CIBC World Markets.