LONDON - Houlihan Lokey, Inc. (NYSE:HLI), the global investment bank, has expanded its Financial and Valuation Advisory business with the acquisition of London-based Prytania Solutions Ltd. (PSL), a technology-driven valuation and analytics service provider. The deal, completed on October 29, 2024, aims to enhance the bank's structured products valuation capabilities through advanced machine learning technology.
PSL, established in 2016 as a spin-out from Prytania Investment Advisors, specializes in structured credit valuations and analytics, leveraging quantitative analysis and machine learning. The company serves a diverse clientele, including banks, asset managers, insurance companies, central banks, and financial data platforms.
The acquisition integrates PSL's team, led by CEO Fraser Malcolm and CTO James Wright, into Houlihan Lokey's existing Structured Products Valuation Advisory team. This move is expected to strengthen the bank's technology capabilities and expand its European presence.
Kreg Jackson, Global Co-Head of the Financial and Valuation Advisory business at Houlihan Lokey, emphasized the strategic significance of acquiring PSL to bolster the firm's global valuation team and technology offerings. Dr. Cindy Ma, Managing Director and Global Head of Portfolio Valuation and Fund Advisory Services at Houlihan Lokey, highlighted the seamless integration of PSL's data-rich technological innovations into their service portfolio.
Fraser Malcolm of PSL expressed enthusiasm for joining Houlihan Lokey, anticipating the delivery of innovative and customized services on a larger scale. Scott Adelson, CEO of Houlihan Lokey, reiterated the importance of data in achieving excellent client outcomes and the company's commitment to advanced data strategies and technology.
Houlihan Lokey's Portfolio Valuation and Fund Advisory Services practice is recognized for its valuation services to hedge funds, private equity firms, and credit funds, having received multiple industry accolades.
The financial terms of the transaction were not disclosed. This acquisition is based on a press release statement, and it marks a continuation of Houlihan Lokey's efforts to use cutting-edge technologies to enhance its advisory services.
In other recent news, Houlihan Lokey, a global investment bank, has reported a robust start to its fiscal year 2025. The firm's first-quarter revenues reached $514 million, marking a 24% increase from the previous year. Adjusted earnings per share also rose by 37%, reaching $1.22. The Corporate Finance division led this growth with a 45% revenue increase, while Financial Restructuring revenues slightly declined.
The firm has made significant personnel additions, appointing Geoff Rhizor as a Managing Director in its Technology Group and Andrew Atherton as a Managing Director for its FinTech Group. Both are expected to bring their wealth of experience to their respective sectors. Additionally, Houlihan Lokey has amended its incentive award plan, which impacts the number of shares available for issuance to employees.
Houlihan Lokey's shareholders have elected four Class III directors to the board and approved the compensation of the named executive officers. They also ratified the appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending March 31, 2025. Looking forward, Houlihan Lokey has expressed optimism about continued growth quarter-over-quarter, given favorable market conditions. However, the firm expects the tax rate to be at the higher end of the historic range due to operations in higher tax jurisdictions. These are among the recent developments at Houlihan Lokey.
InvestingPro Insights
Houlihan Lokey's acquisition of Prytania Solutions Ltd. aligns well with its strong financial performance and market position. According to InvestingPro data, the company boasts a market capitalization of $11.45 billion, reflecting its significant presence in the investment banking sector. The firm's revenue growth of 11.37% over the last twelve months and an impressive 23.5% quarterly growth underscore its expanding business operations.
InvestingPro Tips highlight Houlihan Lokey's consistent dividend performance, having raised its dividend for 9 consecutive years and maintained payments for a decade. This speaks to the company's financial stability and commitment to shareholder returns, which could be further bolstered by the strategic acquisition of PSL.
The company's strong profitability is evident from its high gross profit margin of 93.51% and operating income margin of 19.11%. These robust margins suggest that Houlihan Lokey is well-positioned to integrate PSL's technology-driven services without compromising its financial health.
Investors should note that Houlihan Lokey is trading at a relatively high P/E ratio of 34.37, which may indicate market confidence in its growth prospects, including the potential benefits from the PSL acquisition. The company's strong return over the last year, with a 70.25% price total return, further supports this positive outlook.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips that could provide valuable insights into Houlihan Lokey's investment potential following this strategic move.
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