Financo, a longstanding boutique investment firm well known within retail, beauty and fashion circles, is being purchased by Raymond James Financial Inc., a publicly traded firm that raises capital for and advises corporate, individual and municipal clients.
The purchase price was not disclosed. The deal is expected to close by the end of March, which is Raymond James Financial’s second quarter.
“With our strong capital position and the growing demand for effective investment banking expertise among consumer and retail companies, this deal allows us to strategically grow our capabilities,” Paul Reilly, chairman and chief executive officer of Raymond James Financial, said in a statement.
“As the consumer and retail spaces undergo significant shifts in business models and shopping behavior, we see tremendous growth opportunity for M&A and growth capital-raising in the space, which are Financo’s main areas of expertise,” said Jim Bunn, president of Raymond James Global Equities & Investment Banking. “This acquisition significantly expands our consumer group and deepens our private-equity relationships, further assuring Raymond James is well-positioned.”
In its statement on the acquisition, RJF indicated that since 2015, it participated in raising nearly $280 billion in capital for its corporate clients and completed 875 advisory assignments, including nearly 750 merger and acquisition buy-side or sell-side advisory assignments. Total client assets are $923 billion.
Financo so far this year completed just four transactions, whereas in 2019, there were 23.
Financo was founded 50 years ago by Gilbert W. Harrison, who turns 80 on Christmas Day. Through his outsized personality and assertive manner of pursuing business, Harrison established Financo as a vibrant boutique banking firm with a wide reputation exceeding the size of the company.
In 2012, Harrison brought in John Berg, a private-equity executive and former investment banker, as a partner and ceo of Financo. Harrison stayed on as chairman of Financo until two and half years ago, retiring from the firm, and Berg added the title of chairman. Harrison remains active in the financial world, serving on the board of Interparfums, as a senior adviser to eShopWorld, a consultant to Li & Fung, and continuing to work on transactions.
“It’s an end of an era,” said Harrison on Friday, following the announcement from RJF on the deal. “It’s sad that Financo will no longer be an independent boutique financial advisory firm, but on the other hand, I wish all the professionals, several of whom I trained, all the best in the world.” Among the veteran Financo executives Harrison worked with are managing directors Lee Helman, Vennette Ho and Karen Goodman, as well as Scott Abrams, chief financial officer and others. Financo has a team of more than 25 professionals.
Berg continues as Financo’s ceo and will leave the title of chairman unfilled at least for the time being.
Under Berg, Financo strengthened its involvement in beauty and personal care, direct-to-consumer e-commerce, active and home furnishings, and reduced the focus on fashion.
The combined consumer and retail practice will be led by Berg, who has nearly 30 years of experience as an investment banker and private-equity investor in the consumer and retail space.
“Financo and Raymond James share the same values and client-first culture, and with similar approaches to how we do business, we were drawn to their people and their desire to focus on serving the client,” Berg said in a statement. “I’ve long admired Raymond James and the growth of its investment banking franchise.”
“This agreement marks an exciting new chapter for the Raymond James Investment Banking platform,” said Mark Goodman, who is presently the head of Raymond James Consumer & Retail Investment Banking and will continue working with clients and building the practice as vice chairman once the transaction is completed.