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  • Seller
  • Buyer
  • Type
  • Date Announced
  • Seller AUM
  • FBR & Co.
  • B. Riley Financial, Inc.
  • Securities and Investment Banking
  • February 21, 2017
  • N/A

Seller Details

Founded in 1989, FBR & Co. has a strong, well-established track record as a full service investment bank with approximately 260 employees. FBR provides investment banking, M&A advisory, institutional brokerage, and research services with focused capital and financial expertise in consumer; energy & natural resources; financial institutions; healthcare; insurance; industrials; real estate; and technology, media & telecom industries. The combined entity will have offices throughout the U.S., including in New York, Los Angeles, San Francisco, Boston, Dallas, Houston and the greater Washington, DC metro region.

Buyer Details

B. Riley Financial is a publicly traded, diversified financial services company addressing capital raising and financial advisory needs of public and private companies and high net worth individuals.  Headquartered in Los Angeles, CA with offices in major financial markets throughout the United States, Australia and Europe, the firm consists of over 200 professionals whose cross-platform expertise is mobilized to provide a myriad of financial solutions.

The Company operates through several wholly-owned subsidiaries, including B. Riley & Co., LLC (B. RILEY), a FINRA-licensed broker dealer; Great American Group, LLC, provider of advisory and valuation services, asset disposition and auction solutions, commercial lending, and real estate advisory services; B. Riley Capital Management, LLC, (which includes B. Riley Asset Management, a SEC-registered investment advisor providing investment products to institutional and high net worth investors, and B. Riley Wealth Management, a multi-family office practice and wealth management firm focused on the needs of ultra-high net worth individuals and families; Great American Capital Partners, a provider of senior secured loans and second lien secured loan facilities to middle market public and private U.S. companies and B. Riley Principal Investments, a group that makes proprietary investments in other businesses, such as the acquisition of United Online, Inc. in July 2016.

Transaction Summary

B. Riley Financial, Inc., a diversified financial services company, has signed a stock for stock merger agreement to acquire FBR & Co., a leading investment banking and brokerage firm, in a transaction valued at $160.1 million ($20.28 per share) based on 17 February 2017 closing price of $17.55 for B. Riley Financial's common shares and an anticipated payment of a special cash dividend concurrent with closing of $8.50 per share.

B. Riley Financial and FBR combined will become a clear leader in small cap investment banking and brokerage in the U.S. with 600 names under research coverage.  Upon closing, Richard Hendrix, FBR's current Chairman and CEO, will assume the role of CEO of the combined investment banking and brokerage business, which will be a subsidiary of B. Riley Financial.

FBR's banking and brokerage businesses strategically align with B. Riley's current operations with limited overlap of clients, coverage and capital raising activities.  The transaction further diversifies the overall business of B. Riley Financial and adds FBR's leading initial equity franchise to B. Riley Financial's successful capital markets capabilities.  In addition, the combination allows for expanded geographic distribution reach with significant operations on the East and West coasts.
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