Boutique investment bank Perella Weinberg Partners is in advanced discussions to combine with a blank-cheque vehicle sponsored by Betsy Cohen, a 79-year old commercial banking tycoon, according to people familiar with the matter.
A deal with FinTech Acquisition Corporation IV, the fourth special purpose acquisition company set up by Ms Cohen, would see PWP list its deal advisory business at about a $760m equity valuation, those people said. The transaction is expected to be announced before the end of the year.
Fintech Acquisition Corp IV raised $230m in its September initial public offering. Most of that cash is to be used to pay down PWP’s existing debt, most of which comes from its 2016 acquisition of Tudor, Pickering, Holt & Co, a Texas energy-focused investment bank.
The rest of the proceeds of the Spac deal, which will also include a further $200m investment from institutional investors, will be used to return cash to PWP founding backers as well as pay some of the firm’s retired partners.
PWP declined to comment. Fintech Acquisition Corporation IV could not immediately be reached.
PWP was founded in 2006 by the legendary mergers and acquisitions banker Joe Perella and Peter Weinberg, a longtime Goldman Sachs executive whose family had been at the top of that firm for decades.
The PWP’s partners will continue to own the majority of the investment bank and, once listed, the top partners are likely to have a super majority that will allow them to retain full control over the business.
The New York-based company’s mooted valuation is set to be roughly 16 times its 2021 forecast net income — in line with peers such as PJT, Evercore, Moelis & Co and Lazard. But PWP’s overall valuation is modest compared with the roughly $1bn it raised at its origin from investors that included wealthy families such as the Weinbergs and the Gettys, as well as large institutions in the Middle East.
The boutique bank sector became increasingly crowded after the financial crisis, forcing PWP’s deals business to compete against several upstart firms with similar business models. Moelis, the independent investment bank founded in 2007 by former Drexel Burnham Lambert star Ken Moelis, has a current market capitalisation of almost $3bn.
PWP has been planning to go public for several years and hired Goldman Sachs and JPMorgan Chase to advise them on the listing in 2018. It also made key leadership changes in preparation for the IPO, including naming Mr Weinberg chief executive, while Bob Steel, the former Treasury Department official who joined PWP in 2014 as CEO, took over the chairmanship. Mr Perella remains a founding partner.
PWP also has a separate asset management business, with $10bn in assets, that will remain independent of the listed company.
Ms Cohen, who is a lawyer by training, has had a colourful career as one of the earliest entrepreneurs in the commercial banking industry. She founded her first bank, Jefferson Bank, in 1974 and later went on to set up businesses in Hong Kong and Brazil.
The first three vehicles sponsored by Ms Cohen merged with CardConnect, Intermex Wire Transfer and Paya, each a payments company, respectively.
CardConnect was acquired in 2017 by First Data for $15 per share, above the $10 per share Spac listing price. Intermex, similarly is above $10, trading currently at $16 per share. Paya, whose merger closed in October, trades at $11.