New York-based Duff & Phelps Corporation – a financial advisory and investment banking firm – announced a deal whereby a consortium –involving The Carlyle Group LP (CG - Free Report) , Stone Point Capital LLC, Pictet & Cie and Edmond de Rothschild Group – will acquire it. The deal is priced at $665 million.
The acquiring companies will pay $15.55 per share in cash – a 19% premium on the closing price of the shares on December 31, 2012 – to buy Duff & Phelps stake. The proportions of the stake buyout were not specified, but none of the acquiring firms would be buying more than 35% of the shares individually as per Duff & Phelps. The transaction is expected to close in the first half of this year.
The deal allows Duff & Phelps a ‘go-shop’ interlude commencing immediately and ending on February 8, during which it will look for higher offers from other potential buyers. Duff & Phelps would pay a break-up fee of nearly $6.65 million to the consortium if it gets a higher bid and ends the deal before March 8.
Centerview Partners advised Duff & Phelps on the deal and Kirkland & Ellis LLP provided legal guidance. The consortium was advised by Sandler O’Neill + Partners, L.P, Credit Suisse Group (CS - Free Report) , Barclays PLC (BCS - Free Report) and RBC Capital Markets – a wing of Royal Bank of Canada (RY - Free Report) . Wachtell Lipton Rosen & Katz was the legal counsel for the consortium.
Duff & Phelps provides valuation and merger advices to other companies. The company is looking forward to grow significantly on account of higher regulatory demand, implementation of new accounting policies and requirements for amplified corporate disclosure and third-party validation. Now, with the presence of big private equity firms, it is all set to utilize this growth opportunity as well as expand internationally.
Currently, Duff & Phelps retains a Zacks#3 rank, which translates into short-term Hold rating.