B. Riley Financial Announces Carve Out Transaction with B. Riley Securities
B. Riley Financial (NASDAQ: RILY) has announced a strategic carve-out transaction involving its investment banking subsidiary, B. Riley Securities (BRS). Through a merger with Cascadia Investments, BRS will now operate independently with its own governance structure and trade on the OTC Pink market under 'BRLY'. B. Riley Financial retains approximately 89% ownership, with remaining shares held by BRS employees and certain Cascadia shareholders.
BRS, which will be debt-free and well-capitalized, will be led by Andy Moore and Jimmy Baker as Co-CEOs. Since 2017, BRS has led over 250 capital markets transactions, raised more than $115 billion in debt and equity, and advised on M&A and restructuring deals exceeding $33 billion in total value.
The tax-free separation aims to provide enhanced transparency for stakeholders and enable independent valuation of BRS as a pure-play investment bank focused on small cap and middle markets. BRS will maintain its own board of directors, with four members appointed by BRF, including two independent directors within 30 days.
B. Riley Financial (NASDAQ: RILY) ha annunciato una transazione strategica di scorporo che coinvolge la sua sussidiaria di investment banking, B. Riley Securities (BRS). Attraverso una fusione con Cascadia Investments, BRS opererà ora in modo indipendente con una propria struttura di governance e sarà quotata nel mercato OTC Pink sotto il simbolo 'BRLY'. B. Riley Financial detiene circa l'89% della proprietà, con le azioni rimanenti detenute dai dipendenti di BRS e da alcuni azionisti di Cascadia.
BRS, che sarà priva di debiti e ben capitalizzata, sarà guidata da Andy Moore e Jimmy Baker come Co-CEO. Dal 2017, BRS ha gestito oltre 250 transazioni nei mercati dei capitali, raccogliendo più di 115 miliardi di dollari in debito e capitale, e ha fornito consulenza su operazioni di M&A e ristrutturazione per un valore totale superiore a 33 miliardi di dollari.
La separazione senza imposte mira a fornire una maggiore trasparenza per gli stakeholder e a consentire una valutazione indipendente di BRS come una banca d'investimento focalizzata esclusivamente su piccole e medie imprese. BRS manterrà un proprio consiglio di amministrazione, con quattro membri nominati da BRF, inclusi due direttori indipendenti entro 30 giorni.
B. Riley Financial (NASDAQ: RILY) ha anunciado una transacción estratégica de escisión que involucra a su subsidiaria de banca de inversión, B. Riley Securities (BRS). A través de una fusión con Cascadia Investments, BRS ahora operará de manera independiente con su propia estructura de gobernanza y cotizará en el mercado OTC Pink bajo el símbolo 'BRLY'. B. Riley Financial retiene aproximadamente el 89% de la propiedad, con las acciones restantes en manos de empleados de BRS y ciertos accionistas de Cascadia.
BRS, que estará libre de deudas y bien capitalizada, será dirigida por Andy Moore y Jimmy Baker como Co-CEOs. Desde 2017, BRS ha liderado más de 250 transacciones en los mercados de capitales, recaudando más de 115 mil millones de dólares en deuda y capital, y ha asesorado en operaciones de M&A y reestructuración que superan un valor total de 33 mil millones de dólares.
La separación libre de impuestos tiene como objetivo proporcionar una mayor transparencia para las partes interesadas y permitir una valoración independiente de BRS como un banco de inversión puro centrado en pequeñas y medianas empresas. BRS mantendrá su propio consejo de administración, con cuatro miembros nombrados por BRF, incluidos dos directores independientes dentro de 30 días.
B. Riley Financial (NASDAQ: RILY)는 투자은행 자회사인 B. Riley Securities (BRS)와 관련된 전략적 분할 거래를 발표했습니다. Cascadia Investments와의 합병을 통해 BRS는 이제 자체 거버넌스 구조로 독립적으로 운영되며 'BRLY'라는 이름으로 OTC Pink 시장에 상장됩니다. B. Riley Financial은 약 89%의 지분을 보유하고 있으며, 나머지 주식은 BRS 직원과 일부 Cascadia 주주들이 보유하고 있습니다.
BRS는 부채가 없고 자본이 충분하며 Andy Moore와 Jimmy Baker가 공동 CEO로 이끌게 됩니다. 2017년 이후, BRS는 250건 이상의 자본 시장 거래를 주도하며, 1,150억 달러 이상의 부채 및 자본을 조달하고, 330억 달러 이상의 M&A 및 구조 조정 거래에 대해 자문을 제공했습니다.
B. Riley Financial (NASDAQ: RILY) a annoncé une transaction stratégique de scission impliquant sa filiale de banque d'investissement, B. Riley Securities (BRS). Grâce à une fusion avec Cascadia Investments, BRS opérera désormais de manière indépendante avec sa propre structure de gouvernance et sera cotée sur le marché OTC Pink sous le symbole 'BRLY'. B. Riley Financial détient environ 89% de la propriété, les actions restantes étant détenues par des employés de BRS et certains actionnaires de Cascadia.
BRS, qui sera sans dettes et bien capitalisée, sera dirigée par Andy Moore et Jimmy Baker en tant que Co-CEO. Depuis 2017, BRS a dirigé plus de 250 transactions sur les marchés des capitaux, levé plus de 115 milliards de dollars en dette et en capital, et conseillé sur des opérations de M&A et de restructuration dépassant un montant total de 33 milliards de dollars.
La séparation sans impôt vise à offrir une transparence accrue aux parties prenantes et à permettre une évaluation indépendante de BRS en tant que banque d'investissement purement axée sur les petites et moyennes entreprises. BRS maintiendra son propre conseil d'administration, avec quatre membres nommés par BRF, dont deux administrateurs indépendants dans les 30 jours.
B. Riley Financial (NASDAQ: RILY) hat eine strategische Abspaltungstransaktion angekündigt, die ihre Investmentbanking-Tochtergesellschaft B. Riley Securities (BRS) betrifft. Durch eine Fusion mit Cascadia Investments wird BRS nun unabhängig mit einer eigenen Governance-Struktur agieren und an der OTC Pink-Markt unter dem Symbol 'BRLY' gehandelt. B. Riley Financial hält etwa 89% der Anteile, während die verbleibenden Aktien von BRS-Mitarbeitern und bestimmten Cascadia-Aktionären gehalten werden.
BRS, das schuldenfrei und gut kapitalisiert sein wird, wird von Andy Moore und Jimmy Baker als Co-CEOs geleitet. Seit 2017 hat BRS über 250 Transaktionen im Kapitalmarkt durchgeführt, mehr als 115 Milliarden Dollar an Schulden und Eigenkapital beschafft und bei M&A- und Restrukturierungsdeals mit einem Gesamtwert von über 33 Milliarden Dollar beraten.
Die steuerfreie Trennung zielt darauf ab, eine verbesserte Transparenz für die Stakeholder zu bieten und eine unabhängige Bewertung von BRS als reine Investmentbank, die sich auf Small-Cap- und Mittelstandsunternehmen konzentriert, zu ermöglichen. BRS wird einen eigenen Vorstand behalten, wobei vier Mitglieder von BRF ernannt werden, darunter innerhalb von 30 Tagen zwei unabhängige Direktoren.
- Tax-free transaction structure minimizes costs
- BRS will operate debt-free with strong capitalization
- Enhanced transparency through independent financial reporting
- Proven track record with $115B+ in capital raised since 2017
- BRF maintains 89% ownership stake and consolidation benefits
- Moving from NASDAQ to OTC Pink market may reduce visibility and liquidity
- Additional operational costs from separate governance structure
- Potential conflicts between minority shareholders and majority owner BRF
Insights
This carve-out transaction represents a significant strategic restructuring for B. Riley Financial. By separating B. Riley Securities into a semi-independent entity with its own governance structure and OTC listing, the company is creating greater operational flexibility while maintaining 89% ownership.
The transaction appears strategically sound for several reasons. First, it allows BRS to operate with a more focused strategy serving the middle market, potentially improving its competitive positioning. Second, the debt-free structure of BRS provides financial stability and flexibility as it pursues growth. Third, the separate financial reporting will create transparency that may help investors better value this business segment.
Historically, BRS has demonstrated solid performance, having led over 250 capital markets transactions, raised $115 billion in debt and equity, and advised on M&A and restructuring deals worth $33 billion. The leadership continuity with Andy Moore and Jimmy Baker, who have guided the business for nearly two decades, suggests operational stability through this transition.
For B. Riley Financial shareholders, this structure preserves upside exposure to BRS through the majority stake while potentially unlocking value through more transparent segment reporting. The tax-free nature of the transaction and minimal implementation costs further enhance the financial appeal of this restructuring.
This transaction employs a creative corporate restructuring approach that accomplishes multiple objectives simultaneously. By merging BRS with a shell entity (Cascadia), B. Riley creates a distinct corporate identity while maintaining overwhelming economic control through the 89% ownership position.
The equity structure is particularly noteworthy - the non-BRF owned 11% will be held exclusively by BRS employees through restricted stock awards and select Cascadia shareholders. This employee ownership component creates alignment between management and performance while potentially serving as a retention mechanism for key talent.
The governance structure shows thoughtful design: a five-member board with four BRF appointees, including two independent directors within 30 days. This maintains appropriate control while introducing independent oversight, addressing potential governance concerns that might arise from the parent-subsidiary relationship.
From a financial perspective, the clean balance sheet approach is compelling. Launching BRS as a debt-free entity maximizes financial flexibility in the investment banking business, which is highly sensitive to market cycles. This structure allows BRS to pursue growth opportunities without legacy debt constraints while providing a clearer view of its standalone economics.
The OTC Pink listing creates liquidity potential without the full regulatory burden of a major exchange listing - appropriate for an entity with a concentrated ownership structure and aligned with the stated goal of transparency without excessive costs.
B. Riley Securities (BRS) to Serve Distinct Needs of Companies Across Middle Market Segments
Well Capitalized and Debt Free, BRS to Benefit from Separate Operating and Governance Structures
B. Riley Financial to Retain ~
As part of the tax-free transaction, BRS is implementing its own operating and governance structure, and its common stock will now be quoted on the OTC Pink market under the ticker symbol "BRLY." BRS will independently report financial results, which will provide stakeholders with enhanced transparency and the ability to independently value a pure-play investment bank focused on the small cap and middle markets.
Since acquiring FBR in 2017, BRS has led more than 250 capital markets transactions, raised in excess of
Bryant Riley, Chairman and Co-Chief Executive Officer of BRF, commented: "BRS has been the foundation of our firm's success ever since we started a smaller broker dealer focused on small cap companies in 1997. Through this transaction, we are enabling the leadership team of BRS to return to those roots, operate separately and execute a distinct growth strategy. As we demonstrated at our 2023 Investor Day, BRS has historically delivered steady EBITDA and strong cash flow, and we expect that as a separate entity, the firm will be able to return to and eventually exceed those levels of growth and profitability. Through BRF's
Mr. Moore and Mr. Baker added: "We are extremely enthusiastic about how this transaction repositions our firm and what it means for our ability to serve our clients. With a well-capitalized balance sheet, no debt and an exceptional team, BRS is purpose-built to serve the middle market with unmatched capabilities across Capital Markets, Research and M&A Advisory. We will stay true to our heritage and relentlessly focus on executing on behalf of our clients. We look forward to embarking on this next chapter and delivering for all stakeholders."
Transaction Details
The transaction has been structured as a tax-free separation with minimal costs. After giving effect to the transaction, BRF owns approximately
BRS are quoted on the OTC Pink market under the ticker symbol "BRLY." The BRS Board of Directors consists of five members, with four appointed by BRF including, no later than 30 days from the date of the transaction, two directors independent of BRF and BRS. BRF will continue to consolidate the financial results for BRS in its financial results.
Advisors
Sullivan & Cromwell served as legal counsel to BRF, and O'Melveny & Meyers served as legal counsel to BRS in conjunction with the announcement.
About B. Riley Financial
B. Riley Financial (BRF) is a financial services company that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. BRF leverages cross-platform expertise to provide clients with full service, collaborative solutions at every stage of the business life cycle. Through its affiliated subsidiaries, BRF provides end-to-end financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. BRF opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. B. Riley or BRF refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries or affiliates. For more information, please visit www.brileyfin.com.
About BRS
BRS provides a full suite of investment banking and capital markets services to corporations, financial sponsors, and institutional investors across all industry verticals. Investment banking services include initial, secondary, and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, SPACs, corporate restructuring and liability management. Widely recognized for its thematic proprietary equity research, clients benefit from BRS' extensive network, industry expertise, and proven execution capabilities of our end-to-end financial services platform. For more information, visit www.brileysecurities.com.
Forward-Looking Statements
Statements made in this press release that are not descriptions of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, including the ability of BRS to successfully execute under its own operating and governance structure, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of today's date. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's or BRS's performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and neither the Company nor BRS assumes any duty to update forward-looking statements, except as required by law. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, some of which are beyond the control of the Company and the BRS, including, but not limited to, the risks described from time to time in the Company's periodic filings with the SEC, including, without limitation, the risks described in the Company's 2023 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable). These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and neither the Company nor BRS undertakes any duty to update this information.
Contacts
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SOURCE B. Riley Financial
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