Piper Jaffray Cos. on Jan. 3 completed its acquisition of 100% of Sandler O'Neill & Partners LP for $485 million.
Effective on the closing date, the acquiring company changed its name to Piper Sandler Cos. and its ticker symbol to PIPR from PJC at the New York Stock Exchange. The company's wholly owned broker/dealer, Piper Jaffray & Co., has also changed its name to Piper Sandler & Co.
Of the total purchase price, $350 million was paid in cash to Sandler O'Neill stockholders, while $135 million was to be paid to Sandler O’Neill employee-partners primarily in the form of restricted shares of common stock, subject to the terms and conditions of the restricted stock agreements.
The total number of restricted shares of common stock issued as equity consideration was 1,568,670, with an aggregate value of about $114.7 million, based on the price per share of $73.0890 under the merger agreement. The company has also implemented a retention program with a pool of $115 million for Sandler O’Neill employees in the form of generally restricted shares of Piper Jaffray’s common stock, subject to the terms of the agreement.
The funds used for the purchase came from a mix of cash flows from operations, cash proceeds from the sale of Advisory Research Inc. and proceeds from the issuance of unsecured fixed-rate senior notes to Pacific Investment Management Co. LLC, according to a regulatory filing.
Effective with the deal's closing, James Dunne III, senior managing principal of Sandler O'Neill, becomes vice chairman of Piper Sandler Cos. and senior managing principal of Piper Sandler & Co.'s financial services group. Jonathan Doyle, senior managing principal of Sandler O'Neill, has been appointed to Piper Sandler Cos.' board as vice chairman and will lead the financial services group as senior managing principal. Also as per the merger agreement, a second, mutually agreed individual will be appointed to the board in the first quarter of 2021.
For the merger transaction, Wachtell Lipton Rosen & Katz served as legal adviser to Sandler O'Neill, while Sullivan & Cromwell LLP served as legal adviser to Piper Jaffray.