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Moelis Files for Initial Public Offering Amid M&A Rebound

Photographer: Andrew Harrer/Bloomberg

Moelis & Co., the firm founded by Kenneth Moelis, provides financial-advisory, capital-raising and asset-management services. Close

Moelis & Co., the firm founded by Kenneth Moelis, provides financial-advisory,... Read More

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Photographer: Andrew Harrer/Bloomberg

Moelis & Co., the firm founded by Kenneth Moelis, provides financial-advisory, capital-raising and asset-management services.

Kenneth Moelis, who over 30 years as an investment banker has advised companies controlled by billionaires including Carl Icahn, Donald Trump and Steve Wynn, is preparing to take the firm he founded public as dealmaking rebounds to pre-financial crisis levels.

Moelis & Co. said in a filing today it is working with Goldman Sachs Group Inc. and Morgan Stanley on an initial public offering. Moelis is also listed as an underwriter, according to the filing with the U.S. Securities and Exchange Commission, which lists a $100 million size for the deal.

The IPO comes seven years after Moelis, 55, left UBS AG to start his firm -- drawing on a list of clients gathered while working at Drexel Burnham Lambert Inc. and Donaldson Lufkin & Jenrette. Moelis ranked 11th among merger advisers in the 2013, its highest ever position, after advising companies such as HJ Heinz Co. on $134 billion in transactions last year, according to data compiled by Bloomberg.

“They’re gradually taking share from the bulge bracket banks,” Jeff Davis, managing director for the financial institutions group at advisory firm Mercer Capital, said by phone from Nashville, Tennessee. “A small firm like Moelis is well-positioned and has nice momentum getting into higher-profile deals.”

Moelis’s IPO comes years after its rivals took themselves public. Evercore Partners Inc., the firm led by former U.S. Deputy Treasury Secretary Roger Altman, raised $83 million in August 2006 and Robert Greenhill’s Greenhill & Co. (GHL) conducted a share sale in May 2004. Evercore has climbed 168 percent since its initial offering, while Greenhill has more than tripled since its debut.

Staff Costs

Moelis is seeking to raise funds as mergers and acquisitions activity had its strongest start to the year since before the global financial crisis. The total value of announced deals so far this year has reached $463 billion, the highest since 2007, according to data compiled by Bloomberg.

The investment bank increased its revenue by 6.6 percent to $411.4 million in 2013, the filing shows. At the end of the year, Moelis had 317 bankers, after cutting its staff by 7 percent.

Net income doubled to $70.2 million and compensation costs fell to 64 percent of revenue from 71 percent in 2012, the filing shows. That compares with compensation costs of of 54 percent of revenue at Greenhill and 59 percent at Evercore.

Valuation Target

Moelis is looking to raise money at a price-to-earnings ratio in the 30s, similar to the levels at which competitors trade, people familiar with the matter said in January. Evercore and Greenhill both trade at about 35 times earnings, data compiled by Bloomberg show.

The investment bank didn’t specify at what price range it plans to offer the shares, or a time table for the offering. Andrea Hurst, a New York-based spokeswoman for Moelis, declined to comment on the offering timeline.

The investment bank will apply to list its Class A shares on the New York Stock Exchange under the symbol MC, the filing shows.

To contact the reporters on this story: Leslie Picker in New York at lpicker2@bloomberg.net; Zeke Faux in New York at zfaux@bloomberg.net

To contact the editor responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net

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