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Houlihan Lokey (HLI) Up on Acquisition of 90% Shares of GCA

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Houlihan Lokey, Inc.’s (HLI - Free Report) shares gained 3.2% following the acquisition announcement of GCA Corporation. After completing the tender offer process (which began on Aug 4, 2021), Houlihan Lokey acquired 90% of GCA’s common stock.

Houlihan Lokey is expected to acquire GCA’s remaining shares before the end of this year through a second-step transaction.

The buyout has positioned Houlihan Lokey as one of the largest independent investment banking firms by public market capitalization and one of the most geographically diversified firms among global peers.

More than 500 individuals across 24 locations have joined the firm, thereby significantly expanding its presence in Asia and Europe.

Houlihan Lokey’s CEO, Scott Beiser, stated, “This landmark transaction is a truly historic moment for Houlihan Lokey, and we welcome all of our new colleagues to the firm. The addition of GCA significantly expands our technology capabilities, critical to meeting the needs of our clients in an ever more technology-driven world. In addition, the strength of GCA’s platform in Asia-Pacific allows us to achieve scale and better serve clients in this rapidly growing region.”

Scott Adelson, co-president of Houlihan Lokey said, “GCA has proved itself to be a leader in its field, led by an extraordinarily impressive management team. We share a similar business philosophy and a belief in the importance of a strong, client-centric corporate culture. This complementarity is paramount to effectively integrating the two firms, enhancing the services we offer our clients, and maintaining our continued success.”

So far this year, shares of Houlihan Lokey have gained 45.6% compared with 15.7% growth recorded by the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

Currently, it carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

At present, several finance companies, especially banks, are moving toward consolidation to dodge the heightened cost of investments in technology and counter lower rates in a bid to remain competitive. In an effort to diversify revenues, Valley National Bancorp (VLY - Free Report) signed a deal to acquire Bank Leumi Le-Israel B.M.’s U.S. banking arm — Bank Leumi USA — for $1.15 billion.

In August, Seacoast Banking Corporation of Florida (SBCF - Free Report) announced two separate merger agreements. It agreed to acquire Sabal Palm Bancorp, Inc. and Business Bank of Florida, Corp. Further, Webster Financial Corporation (WBS - Free Report) and Sterling Bancorp have received respective shareholder approvals for the all-stock merger between the companies, which was announced in April.