Piper Jaffray's deal to buy BMO Financial Group's Chicago-based municipal bond sales, trading and origination business is its second Midwest acquisition in as many weeks, as it continues an expansion in its fixed income and financial institutions group.
The agreement to acquire BMO Capital Markets GKST Inc., announced Monday, follows Piper's July 13 deal to add River Branch Holdings LLC, a Chicago-based investment banking boutique focused on the financial institutions sector.
"We continue to be in growth mode all over but particularly in fixed income and the FIG space, and we are prudent about growth," Brad Winges, Piper's head of fixed income services and head of investments and trading, said in a phone interview. "We will continue to grow as opportunities arise, but we will not grow just for the sake of growing. We will continue to do what is in the best interests for our clients."
Piper ranks 10th in municipal underwriting this year with a par amount of $9.076 billion as of July 20. It ranks fifth in number of deals, with 383. BMO is ranked 31st in underwriting with a par amount of $705 million in 55 deals, according to data from Thomson Reuters.
"This acquisition represents a compelling strategic and cultural fit," Winges said. "GKST and Piper Jaffray have both cultivated a solid institutional business, rich history and client-centric, partnership culture. Clients from both firms will benefit from broader product offerings and more robust analytical intelligence across a wider distribution network."
Winges also said the addition of these two Chicago-based firms fits nicely with Minneapolis-based Piper's effort to grow in the Midwest.
"We saw the opportunities and wanted to jump on it. Both transactions subject to regulatory approval and customary closing conditions," he said.
The River Branch deal is expected to close in the third quarter and the BMO deal in the fourth quarter of this year. The terms of the transactions weren't disclosed.
