Transactions: McGraw Hill Sells J.J. Kenny Drake, S&P's Muni Inter-Dealer Broker Unit

The McGraw-Hill Cos. announced yesterday it has signed an agreement to sell J.J. Kenny Drake Inc., the municipal bond inter-dealer brokerage unit of Standard & Poor's, to a group of investors. The newly formed company will be called JJKD Holdings Inc.

The municipal trading operations fell outside of Standard & Poor's strategy of providing investment opinions, data, and analytics, according to a statement prepared by Standard & Poor's president Leo O'Neill.

"Accordingly, this provides us a new opportunity under a new framework to be able to grow our business and explore other possible ventures," J.J. Kenny president and chief executive officer Peter Byram said in an interview yesterday.

Founded in 1949 and with offices in New York City, Los Angeles, and Boca Raton, Fla., J.J. Kenny is the oldest inter-dealer broker in municipal bonds, according to the firm. It has been owned by Standard & Poor's for the past 12 years.

The details of the transaction, which is awaiting approval from the National Association of Securities Dealers, were not disclosed. The group of investors who purchased the firm -- composed of owners and executives of other investment banking and investment advisory firms -- include Thomas Burke, who will serve as JJKD Holdings' chairman; Guy Johnson, who will serve as the firm's president; and new chief operating officer Larry Law.

Standard & Poor's will continue to own and operate the J.J. Kenny's evaluations and information services businesses, which were not part of the transaction. The agreement also enables Standard & Poor's to continue to access the J.J. Kenny proprietary trade data on a real-time basis.

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