By Lisa Kerner
Charlotte, N.C., June 4 - Ramius LLC and Cowen Group, Inc. announced they will combine to form a diversified financial services company "positioned to take advantage of the significant opportunities resulting from the historic changes within the economy and the financial services sector."
Under the companies' agreement, Ramius and an affiliate of a third-party investor in Ramius will receive 37.54 million and 2.71 million shares, respectively, of Cowen common stock
Ramius, a privately owned alternative investment firm based in New York, will own 71.24% of the new company, and Cowen, a New York investment banking company, will own the remaining 28.76%.
The new company will retain the Cowen Group, Inc. name and operate out of New York. Its shares are expected to continue to trade under the ticker symbol "COWN" on Nasdaq. Ramius will continue as the investment advisory subsidiary.
As of March 31, the new company would have had a combined book value of over $450 million, including investible assets and cash of approximately $380 million, and minimal debt, according to a Cowen news release.
The transaction is expected to close in the fourth quarter subject to Cowen stockholder approval.
"With no significant overlap in either revenue generation or professional staff, we believe the combined relationships and expertise of our two firms can position the company to take advantage of the corporate finance and investment opportunities that will emerge as growth in the U.S. economy resumes," Ramius founder and managing member Peter A. Cohen said in the release.
Cowen chief executive officer and president Greg Malcolm said, "With core strengths in global alternative investing, strategic advisory services, research, brokerage, and capital markets activity, we believe this combination will provide significant cross-selling and integrated business opportunities by leveraging our relationship networks."
Cohen will be the chairman and CEO of the combined company, and Malcolm will be the CEO and president of the broker-dealer subsidiary.
The combined company will have a 10-member board that includes five members nominated by Ramius, four members from Cowen's board and one member nominated by a significant stakeholder in the combined entity.
Credit Suisse Securities (USA) LLC advised Ramius while Sandler O'Neill + Partners advised Cowen.
| Acquirer: | Ramius LLC
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| Target: | Cowen Group, Inc.
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| Announcement date: | June 4
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| Expected closing: | Fourth quarter of 2009
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| Stock price of target: | Nasdaq: COWN: $4.84 on June 3
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