The question still is hard to answer. But those who care about media finance and dealmaking will watch Houlihan Lokey more closely following its purchase of Mesa Securities, announced today.
Mesa was founded in 2008 and has become one of the busier boutique firms specializing in media and entertainment deals. It has helped arrange transactions for Viacom, Discovery, Miramax, Imax and Relativity. It will have additional firepower now that it’s part of HL. It’s one of the largest privately owned investment banks and is preparing to become even bigger by taking itself public.
“We’ve had our fingers in everything for a long period of time,” Mesa co-founder Mark Patricof tells me. But “we saw ourselves competing against much larger banks, and that becomes difficult.” That could change now. “It’s not so much about getting new deals as getting multiple pieces of them so we can do the whole thing.”
He has just become the fourth co-head of HL’s Technology, Media & Telecommunications Group, joining Chris Wilson, John Cooper and Rob Louv. The companies didn’t disclose business terms for the Mesa acquisition.
The deal is consistent with HL’s recent efforts to increase its clout. The banking firm mostly handles midsized deals but recently made a confidential filing at the SEC for an IPO that could take place by year’s end, the Wall Street Journal reported last week. A stock sale could value the company at close to $2 billion. In addition to the Mesa deal, HL has picked up merger-related firms including ArchPoint Partners, Milestone Advisors and Bridge Strategy Group.
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Patricof didn’t confirm that an IPO is taking place, but he does say that “if you’re an entrepreneur, as I am, you want to be part of something that’s growing.” He adds that Mesa has grown for each of the past eight years and is “very profitable” with revenues in eight figures.
“We had a half dozen offers over the last year,” he says, adding, “I would have been very happy going it alone.” But he liked what he heard about HL’s strategy and plans.
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