MKM Partners Agrees to Be Acquired by Kazakhstani Brokerage
(Bloomberg) -- MKM Partners, the Wall Street boutique known for equities research and trading, signed an agreement to be acquired by Kazakhstani brokerage Freedom Holding Corp.
Freedom, based in Almaty, will acquire all the member interest of Stamford, Connecticut-based MKM for cash and Freedom common stock, with the deal subject to certain conditions including Financial Industry Regulatory Authority approval, the companies said in a statement Friday, confirming an earlier Bloomberg News report.
The transaction, designed to bolster Freedom’s U.S. footprint, is set to value MKM at about $50 million, and includes a three-year retention plan for certain key staff, according to a person with knowledge of the matter, asking not to be identified discussing private information. The takeover would build on Freedom’s acquisition of U.S. broker-dealer Prime Executions Inc. in January.
MKM Partners was founded in 2002 by co-Chief Executive Officers Thomas G. Messina and Steven L. Messina, according to the firm’s website. It focuses on institutional equity trading, sales and research. Robert Wotczak, Prime’s president and CEO, will become CEO of MKM, while Sagar Sheth will remain president. The Messinas will be senior advisers, according to people with knowledge of the matter.
“We see exciting symmetry between MKM Partners business lines and Freedom that will enable new opportunities for growth,” Steven Messina said in the statement. “We expect integration of the companies to be accomplished smoothly given the continuity of management and personnel at MKM Partners.”
Some institutional investors favor equities research published by boutique platforms like MKM over notes published by bulge-bracket firms. That’s in part because of the perception that the research is less likely to be influenced by efforts to appease executives atop companies being wooed by fee-seeking capital-markets and advisory arms of full-service banks.
MKM has more than 1,000 institutional clients as well as offices in other U.S. cities including New York, Boston, Chicago, San Francisco, Los Angeles, Dallas, Houston and Austin, Texas, according to an April statement.
Freedom, which is listed on the Nasdaq, has a market value of about $3.9 billion. In January, it acquired New York-based broker Prime Executions Inc., and Freedom’s majority owner Timur Turlov has said he’s looking to expand further. The company’s shares are up roughly 28% this year.
“With one of the largest distribution forces in the U.S. and a team of distinguished strategists and research analysts, MKM will further enhance Freedom’s international team and extend our activities focused on U.S. growth,” Turlov said in the statement.
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