Cowen to acquire credit products/research, special situations, emerging markets units from CRT

By Lisa Kerner

Charlotte, N.C., March 22 – Cowen Group, Inc. announced it signed a definitive agreement to acquire CRT Capital Group LLC’s credit products, credit research, special situations and emerging markets units.

“This acquisition aligns with Cowen’s disciplined approach to entering businesses that are highly relevant in the current market environment, compliment the company’s current businesses and enhance overall margins,” said Cowen president Jeffrey M. Solomon during a conference call on Tuesday.

CRT is “one of the few independent firms that specializes in distressed debt and special situations trading,” Solomon said.

According to Solomon, “the businesses being acquired are capital-light and agency in nature,” and “do not require significant balance sheet risk as a means to driving revenue.”

CRT’s credit products unit encompasses the sales and trading of distressed convertibles, high-yield securities, distressed debt, private placements and trade claims.

The credit research unit is focused on distressed and special situations coverage and cross-capital structure.

Solomon said the special situations group includes the sales and trading of event driven, post-reorganization equities, spins and other special situations.

The emerging markets unit includes the sales and trading of emerging market credit, non-U.S. corporate debt and local currency debt.

The acquired businesses will be named Cowen Credit Research and Trading. Fifty-seven employees from CRT will go to Cowen.

No financial details were being provided, according to Solomon.

CRT will use the proceeds from the transaction to invest further in its equities, banking and rates businesses, according to a news release.

The transaction is expected to be mildly accretive to Cowen’s earnings and book value and slightly dilutive to tangible book value in the first year. It is slated to close in the second quarter, Solomon said.

Given current market conditions, Cowen believes it is the right time to scale its existing capabilities into fixed-income sales and trading.

“Cowen already has a solid footprint in debt capital markets and investment banking, and the addition of a fixed income agency distribution platform will enable us to provide real value for clients in the crossover, high yield and private debt finance markets,” said Solomon.

CRT’s special situations group “dovetails extremely well” with Cowen’s existing equities franchise and will enable Cowen to provide expanded product capabilities to clients in research, sales and trading, according to Solomon.

Cowen is a New York-based financial services company.

CRT is a Stamford, Conn.-based broker-dealer that offers security brokerage and research services to institutional accounts worldwide.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.