Shares of Nomura Holdings Inc ADR NMR declined 1.7% on the NYSE, following the announcement of its proposed acquisition of Greentech Capital Advisors (“Greentech”), a key financial and strategic advisor in sustainable technology and infrastructure. The deal is expected to close on Mar 31, 2020.
Following the closure, Greentech will be renamed Nomura Greentech and will be a unit of Nomura’s Americas Investment Banking franchise. Per Bloomberg, more than 70 Greentech employees will join the new team in New York, San Francisco and Zurich.
The deal will strengthen Nomura’s global investment banking capabilities and provide existing clients greater access to domain expertise and relationships. Also, the transaction will improveits power, utilities, and infrastructure practice in EMEA. Further, it will expand the company’s footprint by connecting the markets and building new ways to provide sustainable technologies to clients across the United States, EMEA and Asia.
Moreover, Nomura, with its headquarters in Asia, will provide Greentech direct access to its markets. Also, Greentech will benefit from the acquirer’s diverse product capabilities and global reach.
Michael Rintoul, head of investment banking division of Nomura Americas, said: “The proposed transaction allows Nomura to expand its industry expertise in a rapidly growing area leveraging our global footprint as well as financing and solutions capabilities to support our collective client relationships across industries, geographies, and products.”
Also, the founder of Greentech, Jeff McDermott, mentioned that the aim of the company was to become a key global advisory firm (focused on M&A and capital raising) so that it can create value for clients amid the disruption across industries like energy, transportation, food, water, and waste. He also mentioned that Asia, being the largest and fastest growing region,will benefit from Greentech’s expertise. Thus, the deal will help both the companies’clients to boost growth and profitability across geographies.
Nomura is Japan’s largest brokerage firm. Its recent deal reflects efforts to transform its business platform by tapping on growing areas. Also, the company is trimming its international business amid struggles in global trading operations. Notably, in April, it announced plans to achieve $1 billion costs savings in its Wholesale business through layoffs and branch closures.
Shares of this Zacks Rank #2 (Buy) company have gained 29.2% on the NYSE in the year-to-date period, outperforming 18.9% growth recorded by the industry it belongs to. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apart from Nomura, there are many other financial firms that are expanding through acquisitions to counter the challenging operating backdrop and improve revenue mix. Some of these are LPL Financial Holdings Inc. LPLA, Stifel Financial Corporation SF and Glacier Bancorp, Inc. GBCI.
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