(Adds ownership details, sector background, analyst comments)
By Aman Shah
March 4 Investment banker Ken Moelis' boutique
investment firm, Moelis & Co, filed to go public as it looks to
take advantage of rising demand for independent advisory
services and an improving market for public offerings in the
The New York-based independent investment bank, which will
continue to be led by the Wall Street dealmaker, filed a $100
million placeholder with U.S. regulators on Tuesday for the
initial public offering of its class A stock.
The firm was founded in March 2007 after Ken Moelis left UBS
to open his own investment banking shop.
He will retain control of Moelis after it goes public by
holding most of the company's class B shares, which will not be
sold in the offering and count for 10 votes per share.
Since Ken Moelis will control more than 50 percent of the
voting power after the firm goes public, it will qualify for,
and intends to rely on, exemptions from certain corporate
As a result, the investment bank's board will not comprise
of a majority of independent directors following the offering,
Moelis said in a filing with the U.S. Securities and Exchange
Moelis and other employees hold a stake of about 85 percent
stake, with 10 percent being owned by institutional investors,
according to media reports.
Investors would not be too concerned about the dual class
share structure as many successful IPOs have had such
structures, said Josef Schuster, founder of IPOX Schuster, a
Chicago-based IPO research and investment house.
The regulatory filing, which listed Goldman Sachs & Co and
Morgan Stanley as lead underwriters, did not reveal how many
shares would be sold in the offering or their expected price
M&A ADVISORY UPTICK
Last year was the strongest for U.S. IPOs by dollar volume
since 2000, according to Thomson Reuters data, as large floats
such as Hilton Worldwide Holdings and Plains GP Holdings
lifted deal proceeds 21 percent to $56.4 billion.
A recent uptick in mergers and acquisitions activity has
helped independent advisory firms such as Lazard Ltd,
Evercore Partners and Greenhill & Co, who get
most of their profit from advisory services on deals.
About 80 percent of the top 10 deals last year included
independent advisers, up from 30 percent in 2003, Moelis said.
Since its inception, Moelis has advised on over $1 trillion
worth of transactions, including three of the ten largest deals
last year, the company said.
Moelis advised on Warren Buffett and Brazilian
private-equity firm 3G Capital's $23 billion acquisition of H.J.
Heinz Co and the $35 billion merger of advertising agencies
Omnicom and Publicis.
Advisory fees from these deals, among others, helped push
Moelis' revenue up 7 percent to $411.1 million in 2013. Net
income doubled to about $70 million for the year.
"The offering should be definitely received well within the
investor community, given the market conditions," Schuster said.
Lazard shares have gained close to 30 percent in the past
six months. Evercore shares have risen 24 percent and Greenhill
has gained 14 percent in the same period.
Moelis intends to apply to list its Class A stock on the New
York Stock Exchange under the symbol "MC".
The amount of money a company says it plans to raise in its
first IPO filings is used to calculate registration fees. The
final size of the IPO could be different.
(Editing by Savio D'Souza)