Piper Sandler to Acquire Aviditi, Expand Capabilities

Piper Sandler Companies PIPR has announced a definitive agreement to buy Aviditi Advisors, an alternative investment bank. The acquisition will enhance the company's capabilities in fundraising, secondary solutions and direct investment capital. Thus, it will further solidify PIPR's leadership position in the private equity M&A and capital markets sectors.
Aviditi, co-founded by Ryan Schlitt and John Robertshaw, has advised on more than $30 billion of transactions since its inception in 2020. The firm provides comprehensive services across primary fundraising, innovative secondary solutions and capital markets. With offices in New York City, Dallas, London and Munich, Aviditi's integrated model offers best-in-class insights and guidance to financial sponsors, global alternative investment managers and limited partner investors.

Strategic Fit and Enhanced Capabilities

Following the completion of the acquisition (expected in the third quarter of 2024), Aviditi will form Piper Sandler's private capital advisory group. This will, thereby, expand PIPR's investment banking platform.
The addition of approximately 50 professionals, including 10 managing directors, is expected to bolster the company's expertise and presence in North America and Europe. Post-acquisition, Schlitt and Robertshaw will serve as the head and vice chairman of private capital advisory, respectively, at Piper Sandler.
Mike Dillahunt, global co-head of investment banking at Piper Sandler, said, "Fundraising, private capital markets and secondary solutions, including continuation vehicles, are of central importance to financial sponsors. Aviditi provides these critical capabilities and increases the value of our combined platform to our single largest client base – private equity."
The acquisition of Aviditi is poised to enhance Piper Sandler's financial performance by expanding its service offerings and client base. Aviditi's proven track record and specialized expertise will drive new business opportunities and revenue streams. By integrating Aviditi's capabilities, the company will be able to deliver differentiated value to its clients, thereby fostering growth and strengthening its market position.

Conclusion

The acquisition, still subject to regulatory approvals and customary conditions, represents a significant milestone for Piper Sandler. This strategic move not only enhances its service offerings but also positions it for sustained growth and success in the highly competitive investment banking landscape.
Over the years, the company has been enhancing its scale and capabilities through strategic buyouts. These have not only diversified its revenue base but also expanded PIPR's sector coverage, geographical footprint and market share.
Thus, through its scaled platform, Piper Sandler has been witnessing robust top-line growth. As the company continues to hire exceptional talent and broadens industry and product coverage, further top-line growth is anticipated despite near-term industry-wide headwinds.
Shares of this Zacks Rank #1 (Strong Buy) investment bank have rallied 25.2% in the past six months, outperforming the industry's growth of 23.1%.

Other Financial Firms Taking Similar Steps

Last week, Robinhood Markets, Inc. HOOD announced a significant milestone in its expansion strategy by entering into an agreement to acquire Bitstamp Ltd., a globally recognized cryptocurrency exchange. The acquisition, valued at almost $200 million in cash, is set to close in the first half of 2025. It is still subject to regulatory approvals and customary closing conditions.
The acquisition of Bitstamp will propel the company's cryptocurrency division, Robinhood Crypto, into new international markets. Bitstamp's extensive regulatory compliance and global footprint will enable Robinhood to swiftly expand its presence across the EU, the U.K., the United States and Asia.
In May, SouthState Corporation SSB entered into a merger agreement to acquire Independent Bank Group, Inc. IBTX in an all-stock transaction valued at approximately $2 billion.
Per the agreement, IBTX stockholders will receive 0.60 shares of SSB's common stock for each outstanding share of IBTX common stock held. This values the deal at $48.51 per share based on SSB's closing price of $80.85 on May 17, 2024.
Independent Bank is headquartered in McKinney, TX, and had $18.9 billion in total assets, $15.7 billion in total deposits and $14.6 billion in total loans as of Mar 31, 2024. Upon completion of the acquisition, the combined company will have pro forma total assets of $65 billion, deposits of $55 billion and gross loans of $48 billion.

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