TOKYO -- U.S. investment bank Houlihan Lokey seeks to acquire Tokyo-based mergers and acquisitions advisory firm GCA in a deal expected to be worth more than $550 million, Nikkei has learned.
Houlihan is set to launch a tender offer soon to make GCA a wholly owned subsidiary. It plans to offer a roughly 30% premium to Tokyo-listed GCA's share price, which closed at 1,051 yen, or $9.60, on Monday.
The investment bank looks to tap GCA's deep connections to Japan in anticipation of a post-pandemic wave of dealmaking.
Coming under New York-listed Houlihan's umbrella would give GCA more opportunities to provide consulting services to Japanese companies eyeing deals in the U.S.
Houlihan plans to complete the tender offer by the end of this year, with the two companies to integrate in 2022. GCA would be expected to delist from the Tokyo Stock Exchange afterward.
Established in 2004 by bankers Nobuo Sayama and Akihiro Watanabe, GCA is particularly strong in tech fields such as semiconductors and software.
It recently advised Panasonic on the sale of a U.S. lighting subsidiary and was involved in developer Mitsui Fudosan's recent acquisition of the Tokyo Dome. It debuted on the Tokyo Stock Exchange's first section in 2012.
Nobuo Sayama, far left, and Akihiro Watanabe, second from left -- pictured here in 2007 -- were founders of Japanese M&A consultancy GCA. Houlihan, established in 1972, has strength in midsize M&A deals. The company advised on more M&A transactions in the U.S. than any other firm last year, and its market capitalization of more than $6 billion makes it more valuable than rival boutique consultancies such as Lazard and Evercore.
Acquiring GCA would bolster the American company's technology-related business and let it provide more consulting to Japanese clients.
Shares in Houlihan rose nearly 1% Monday to close at $89.96.
The latter is a growing market. Japan saw a record number of deals in the first half of 2021, according to data from Tokyo-based M&A advisory Recof. Trends including the pivot away from carbon-intensive operations are putting companies under pressure to rethink their business models, and many industries are in the process of consolidating.
While a number of Japanese companies are considering deals overseas, there are limits to the support that Japan-based independent advisory firms can provide outside the country.