US investment bank and asset management firm, Piper Jaffray Companies (NYSE: PJC), today announced that it has reached a definitive agreement with the Bank of Montreal (BMO) to acquire BMO Capital Markets GKST Inc. (GKST), BMO’s wholly-owned municipal bond dealer.
Headquartered in Minneapolis, Piper Jaffray is a full-service investment bank and asset management firm focused on mergers and acquisitions, financial restructuring, public offerings, public finance, institutional brokerage, investment management and securities research.
Not only can Piper Jaffray expect to gain from GKST’s core brokerage business, which provides debt securities, but it also hopes to benefit from GKST’s strategic analytics, municipal research, institutional trading, and public finance offerings. As such, Piper Jaffray intends to expand its strategy and analytics capabilities to develop its financial institutions franchise with the acquisition of GKST.
Commenting on the deal, Piper Jaffray Companies’ Chairman and CEO, Andrew Duff, said: “The fixed income business has been a longstanding and core focus for Piper Jaffray, and our commitment to sustainable growth led us to GKST.”
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“This acquisition represents a compelling strategic and cultural fit. GKST and Piper Jaffray have both cultivated a solid institutional business, rich history and client-centric, partnership culture,” said Brad Winges, Head of Fixed Income Services and Head of Firm Investments & Trading at Piper Jaffray. “Clients from both firms will benefit from broader product offerings and more robust analytical intelligence across a wider distribution network.”
The transaction is subject to regulatory approval and customary closing conditions, with expected closure in Q4 2015.
The news comes as new bond sales are accelerating in the $3.6 trillion municipal market. States and cities have issued $231 billion of debt this year, up more than 50 percent from the same period in 2014 and the fastest pace since at least 2003, according to data compiled by Bloomberg.