Financial advisor to Panmure Gordon & Co.
Panmure Gordon to acquire ThinkEquity Partners
February 21,2007 - Panmure Gordon & Co., a London-based stock broker, said it will pay $62.3 million in stock and cash to buy ThinkEquity Partners LLC, a San Francisco-based equity-research and brokerage firm that focuses on growth companies.
The acquisition will infuse much-needed capital into ThinkEquity. Founded in 2001 by former Merrill Lynch and Montgomery Securities strategist Michael Moe and Merrill investment banker Deborah Quazzo, ThinkEquity lost money last year because of high compensation costs for its 180 employees.
It nominally booked $2.8 million of profit on $64.3 million of revenue, but the profit excluded debt interest payments of $2 million and $13.8 million of bonuses owed employees, the companies said. The infusion from Panmure will allow it to pay $3.45 million of the bonuses in March in the form of Panmure Gordon shares. The companies didn't say whether the 2006 interest payments or bonuses have been paid.
ThinkEquity, like many independent brokerage firms that proliferated in the wake of a $1.5 billion research settlement involving Wall Street firms, is struggling for survival without the support of deep-pocketed investment-banking parents. The firms offer research to institutional investors in return for executing stock orders, but have been hampered by rapidly declining commission rates and intense competition.