New York, NY – Last week, Hudson Holdings, the publically traded parent of execution provider Hudson Securities, announced that it was acquiring boutique investment bank and research provider Next Generation Equity Research for an undisclosed sum. Hudson Securities is an institutionally focused trading firm which makes markets in over 15,000 small and mid-cap U.S. and foreign securities and ADRs.
Next Generation Equity Research LLC is a Chicago-based boutique investment bank, founded in 2004, that provides research on small to mid-cap energy, industrials, materials and utilities companies for institutional investors. The research focuses on companies with market capitalizations of less than $5 billion, with a particular focus on companies with market cap of under $500 million. The approach is self described as blocking and tackling approach. The firm helps small companies raise capital and consults on M&A activity. As well the firm provides complete private placement services. The company covers approximately 60 stocks.
The deal, announced on January 21st, 2010 is interesting because it is an example of a U.S. execution provider which has decided that adding a research division makes business sense. As we have said in previous blogs, many U.S. agency and regional brokers experienced sharp gains in trading volume following the demise of Bear Stearns and Lehman Brothers. However, many of these firms have since found their commission revenue to be capped as buy-side clients feel uncomfortable paying them more for “execution only” services. Consequently, a number of agency brokers, ATS’ and ETS’ have been looking for ways to move up the value curve by adding research oriented services.
The acquisition of Next Generation Equity Research is the second significant business initiative undertaken by Hudson Holdings in the past twelve months. In February of last year, Hudson Holdings announced the formation of a new investment banking division to offer corporate finance and capital markets services. The firm hired a 22 member team, headed up by John O’Shea, previously of Westminster Securities Corp.
Refer below to the full text of the Press Release announcing the acquisition of Next Generation Equity Research.
Hudson Holding Corp. Signs Letter of Intent to Acquire Business of Next Generation Equity Research, LLC
JERSEY CITY, N.J., Jan. 21 /PRNewswire-FirstCall/ — Hudson Holding Corporation (OTC Bulletin Board: HDHL), parent of Hudson Securities, Inc., today announced that it has entered into a Letter of Intent to acquire the equity research and investment banking business of Next Generation, LLC, a Chicago based equity research boutique focused on the needs of institutional investors. The consummation of the transaction is subject to completion of due diligence, the negotiation of a definitive agreement, approval by Next Generation’s members, FINRA approval and customary closing conditions. There can be no assurance that the transaction will be completed.
“I am delighted by the anticipated addition of Next Generation’s team and its Chicago office to our roster. Next Generation delivers high quality, unbiased, idea driven research on companies with market capitalizations of $5 billion or less. This will allow Hudson to offer its institutional clients a unique research product that addresses companies that are often overlooked by other firms,” noted Anthony (Tony) M. Sanfilippo, the Company’s Chief Executive Officer.
Timothy M. Fierce, Managing Partner of Next Generation, stated, “We are excited to join Hudson and gain access to their resources. We believe that this will enable us to leverage our platform and expand our existing client base.” Michael W. Boehm, Managing Partner of Next Generation, added, “Hudson gives us the ability to expand our research acumen in the marketplace and advance our investment banking capabilities.”
The parties expect the transaction to be completed in the first quarter of 2010.
Hudson Holding Corporation is a publicly traded company on the OTC Bulletin Board under the symbol “HDHL” and is the parent of Hudson Securities, Inc. and Hudson Technologies, Inc. Hudson Securities, Inc. is dedicated to meeting the liquidity needs of its clients — institutions, hedge funds, asset managers, and broker dealers — by providing execution solutions and making markets in over 15,000 U.S. and foreign securities and ADRs. As a registered broker-dealer under the Securities Exchange Act of 1934, Hudson Securities is a member of the Financial Industry Regulatory Authority (“FINRA”) and has been in business since 1984. Hudson Technologies provides technology services to Hudson Securities and client companies.
Next Generation Equity Research, LLC
Next Generation Equity Research, LLC is an equity research boutique focused on the needs of the institutional investor. It provides unbiased, idea-driven research on small to mid-cap companies in the industrial, airlines, and basic materials sectors. Next Generation’s focus on the small to mid-cap sector fulfills demand for research products covering publicly-held companies often overlooked by other investment firms.
Certain statements contained herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about the Company’s industry, management’s beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here; however, readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.
|Anthony (Tony) M. Sanfilippo||Keith R. Knox||Andrew Lewin|
SOURCE Hudson Holding Corporation