Houlihan Lokey Acquires PSL

Rhea-AI Summary

Houlihan Lokey (NYSE:HLI) has acquired Prytania Solutions (PSL), a London-based provider of technology-driven valuation and analytic services. The acquisition, completed on October 29, 2024, enhances Houlihan Lokey's Portfolio Valuation and Fund Advisory Services practice with PSL's advanced machine learning technology and market-leading tools. PSL, founded in 2016, specializes in structured credit valuations and analytics, serving banking and asset management clients. The PSL team, led by Fraser Malcolm and James Wright, joins Houlihan Lokey's Structured Products Valuation Advisory team. The acquisition strengthens Houlihan Lokey's global valuation capabilities and expands its European presence.

Positive

• Acquisition enhances technological capabilities with machine learning and algorithmic pricing
• Expands European market presence in valuation services
• Strengthens service offering for complex asset valuation
• Adds specialized expertise in structured credit valuations
• Diversifies client base including banks, asset managers, and insurance companies

Negative

• None.

Insights

Financial Technology Analyst

The acquisition of PSL marks a significant technological leap for Houlihan Lokey's valuation services. PSL's machine learning and algorithmic pricing capabilities will transform HLI's ability to value complex structured products and portfolios. This strategic move addresses the growing demand for data-driven valuation services in the financial sector, particularly for hard-to-value assets.

The integration will enhance HLI's competitive position in the $11.6B market cap investment banking space, particularly in Europe. PSL's specialized technology stack, focusing on structured credit valuations, will create operational efficiencies and potentially increase profit margins through automated valuation processes. The deal strengthens HLI's market leadership in portfolio valuation services, evidenced by their consecutive industry awards.

Investment Banking Analyst

This acquisition strategically positions HLI to capture more market share in the lucrative portfolio valuation segment, particularly in Europe. The deal's timing is optimal, given the increasing complexity of financial instruments and growing demand for sophisticated valuation services. By integrating PSL's technology, HLI can scale its valuation services more efficiently while maintaining quality.

The undisclosed transaction value suggests a relatively small but strategically important acquisition that won't significantly impact HLI's balance sheet. The deal's value lies in its potential to generate higher-margin recurring revenue through enhanced technological capabilities and expanded European presence.

Acquisition Bolsters Firm’s Financial and Valuation Advisory Business With Advanced Machine Learning Capabilities

LONDON--(BUSINESS WIRE)-- Houlihan Lokey, Inc. (NYSE:HLI), the global investment bank, has acquired Prytania Solutions Ltd. (PSL), a leading provider of technology-driven valuation and analytic services, as it continues to strengthen its market-leading Financial and Valuation Advisory business and offer clients a differentiated experience using data-driven deliverables.

The acquisition connects PSL’s advanced machine learning technology and market-leading tools with Houlihan Lokey’s structured products valuation clients, further enhancing the capabilities and global reach of Houlihan Lokey’s Portfolio Valuation and Fund Advisory Services practice. In addition, the acquisition expands the European presence of the Financial and Valuation Advisory business and represents a significant step in monetising data insights to serve clients’ evolving needs.

The transaction was signed and closed on 29 October 2024.

Founded in 2016 after a spin-out from Prytania Investment Advisors, London-based PSL specialises in structured credit valuations and analytics, with an emphasis on quantitative analysis and machine learning. The firm primarily caters to banking and asset management clients and has additionally provided specialised services to insurance companies, central banks, financial data platforms, and other collateral financing desks.

As a result of the acquisition, the PSL team, led by Fraser Malcolm, Chief Executive Officer, and James Wright, Chief Technology Officer, has joined the Structured Products Valuation Advisory team within Houlihan Lokey’s Portfolio Valuation and Fund Advisory Services practice.

Kreg Jackson, Global Co-Head of the Financial and Valuation Advisory business at Houlihan Lokey, commented: “The acquisition of PSL represents a significant strategic move for Houlihan Lokey as we continue to expand our global valuation team and strengthen our technology capabilities across our Portfolio Valuation and Fund Advisory Services practice.”

Dr. Cindy Ma, Managing Director and Global Head of Portfolio Valuation and Fund Advisory Services at Houlihan Lokey, added: “PSL’s data-rich technological innovations, in particular the use of machine learning and algorithmic pricing, will seamlessly integrate into our existing service offering and enhance our ability to deliver outstanding independent valuation services for complex assets, and highly customised solutions that adapt to our clients’ ever-evolving needs.”

Fraser Malcolm, Co-Founder and Chief Executive Officer of PSL, commented, “We are delighted to join forces with Houlihan Lokey, a recognised leader with a rich history in financial valuation services. By integrating PSL’s technology-driven solutions with Houlihan Lokey’s globally respected Portfolio Valuation and Fund Advisory Services team, we can provide innovative and customised services on a much larger scale. Together, we are uniquely positioned to offer clients enhanced analytical capabilities and superior insights into the valuation of complex portfolios.”

Scott Adelson, Chief Executive Officer of Houlihan Lokey, commented: “Houlihan Lokey, like PSL, regards data as an essential tool for achieving outstanding outcomes for our clients. This deal underscores our commitment to using advanced data strategies and the latest technologies to continuously drive innovation and excellence in all our services.”

Houlihan Lokey’s Portfolio Valuation and Fund Advisory Services practice, part of the firm’s Financial and Valuation Advisory business, is one of the largest and most respected in the industry, providing valuation services to hedge funds, private equity firms, and credit funds. The firm was recently named “Best Valuations Firm for Hard to Value Assets” at the HFM US Services Award for the eighth time, “Best Valuations Firm for Hard to Value Assets” at the HFM European Services Award for the fifth year running, and “Best Valuations Firm” at the HFM Asia Services Awards also for the fifth year running.

Financial terms of the transaction were not disclosed.

About Houlihan Lokey

Houlihan Lokey, Inc. (NYSE:HLI) is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and financial and valuation advisory. Houlihan Lokey serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of the firm’s commitment to client success across its advisory services. The firm is the No. 1 investment bank for all global M&A transactions, the No. 1 M&A advisor for the past nine consecutive years in the U.S., the No. 1 global restructuring advisor for the past ten consecutive years, and the No. 1 global M&A fairness opinion advisor over the past 25 years, all based on number of transactions and according to data provided by LSEG (formerly Refinitiv).

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030243342/en/

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Source: Houlihan Lokey, Inc.

FAQ

When did Houlihan Lokey (HLI) acquire Prytania Solutions ?

Houlihan Lokey completed the acquisition of Prytania Solutions on October 29, 2024.

What capabilities does the PSL acquisition add to Houlihan Lokey (HLI)?

The acquisition adds advanced machine learning technology, algorithmic pricing, and structured credit valuation capabilities to Houlihan Lokey's Portfolio Valuation and Fund Advisory Services practice.

What is the strategic importance of PSL acquisition for Houlihan Lokey (HLI)?

The acquisition strengthens Houlihan Lokey's global valuation capabilities, expands its European presence, and enhances its ability to provide data-driven valuation services for complex assets.

What type of clients does PSL serve that will benefit Houlihan Lokey (HLI)?

PSL serves banking and asset management clients, insurance companies, central banks, financial data platforms, and collateral financing desks.