KeyCorp invests in cross-border deals with Clearwater acquisition

KeyCorp will be better able to connect US and UK clients for cross-border deals with its announced acquisition of investment banking advisory firm Clearwater Corporate Finance LLP.

KeyCorp's investment bank, KeyBanc Capital Markets Inc., and Clearwater have had a long-standing partnership, but the acquisition will bring the two firms even closer, Randy Paine, president of Key Institutional Bank, said in an interview. The transaction will also provide US sponsor clients with access to European acquisition targets and vice versa, according to the April 22 merger announcement.

"The world is increasingly more and more connected," Paine said. "Having a broader network of potential buyers and access to those buyers, relationships with those buyers, we think is only going to be seen as more attractive."

KeyBanc Capital Markets acquired New York City-based healthcare-focused investment bank Cain Brothers & Co. LLC in 2017, and Portland, Oregon-based technology-focused investment bank Pacific Crest Securities LLC in 2014. Clearwater is its first acquisition outside the US, Paine said.

The firm is actively thinking about ways to expand the investment bank through both international and domestic transactions after the Clearwater deal is closed, he added.

"As we think about Western Europe, we would never take that off of the potential options road map," Paine said. "It would have to be the right fit, the right culture."

Over time, KeyCorp will transition the KeyBanc Capital Markets name to the UK business, Paine said. He hopes the transaction will spur more idea generation among the combined KeyCorp-Clearwater team and create more business opportunities.

KeyCorp plans to keep all of the Clearwater executives in place with oversight from the parent company. The Clearwater team consists of roughly 130 total employees, including 20 partners, across four offices in the UK.

"The people are very talented and can bring a lot to our client base," Paine said. "We're going to look to grow that."