Updated from 9:21 a.m.
The IPO flare shot off last month by the investment-banking boutique
did the trick.
Just weeks after Petrie Parkman filed for an initial public offering,
( MER) announced Monday that it is buying the Denver-based investment firm for an undisclosed sum. The boutique, which specializes in providing merger advisory services to the energy and utility sector, had planned to raise $115 million in the stock offering.
The acquisition will enable Merrill Lynch to bolster its energy investment banking business. A year ago, the big Wall Street firm got back into the energy trading business, after exiting energy trading in aftermath of the collapse of Enron.
"In retrospect it was probably a very good tactical move,'' says David Menlow, president of IPOFinancial.com. "It was basically forcing Merrill's hand."
Menlow notes it's not uncommon for companies to use the IPO registration process as a way either attract potential suitors, or pressure a would-be buyer into making a move.
Petrie Parkman, founded in 1989, earned $4.3 million on $74.3 million in revenue in 2005. The tiny firm, with about 50 employees, had experienced rapid growth in recent years by advising on a number of corporate deals and co-managing IPOs for energy companies.
But Petrie Parkman decided to come public at an inauspicious time, given the lukewarm reception for a number of boutique investment-firm IPOs and the big slide in oil and gas prices.
The past few months have not been kind to many boutique investment firms. Shares of
, the former investment banking arm of France's Societe Generale, have struggled since the firm was spun off in a $179.5 million IPO in July. During that same month,
pulled plans to spin off its Ryan Beck brokerage arm in an IPO.
This year, the most successful boutique to go public is
, the merger advisory shop started by Roger Altman, a former U.S. deputy treasury secretary. Shares of Evercore have risen 66% since their August debut.
But Evercore has ranked as the exception. Still, that is not deterring other boutique firms from looking for IPO gold
Just today, Keefe Bruyette Woods updated the registration statement for its own upcoming IPO, saying it expects to price shares around $20. That's the midpoint between the $19 to $21 a share range it's projecting. The planned offering is expected to raise $128 million, with the firm, which specializes in providing investment-banking services to the financial sector, receiving about $67 million in net proceeds. The deal values Keefe at about $600 million.
Keefe, ironically, was the lead underwriter on the Petrie Parkman IPO. Keefe, however, didn't lose out. It advised Petrie Parkman on the merger with Merrill Lynch.