Cowen and CEFC China Form Strategic Partnership

Cowen and CEFC China Form Strategic Partnership
29.03.2017 01:15 pm

Cowen and CEFC China Form Strategic Partnership

Infrastructure

Cowen Group, Inc. (“Cowen”) (NASDAQ:COWN) and China Energy Company Limited (“CEFC China”) today announced the execution of a Stock Purchase Agreement and an Investor Rights Agreement pursuant to which CEFC China, through an offshore entity under its control, would acquire, subject to receipt of governmental approvals and satisfaction of other customary closing conditions, a common stock interest representing approximately 19.9% of Cowen’s outstanding common shares as of closing for an aggregate purchase price of approximately $100 million (“Equity Investment”). CEFC China has also agreed to provide Cowen with $175 million in debt financing (“Debt Financing”), which, combined with the Equity Investment, reflects CEFC China’s intention of making a long-term strategic investment in Cowen. CEFC China is the largest private company in Shanghai, the seventh largest private company in China and the 229th largest company on the Fortune Global 500 List.

Pursuant to the Stock Purchase Agreement, CEFC China will make the Equity Investment through the purchase of newly issued shares of Class A Common Stock at the price of $18.00 per share. The price represents a 29.5% premium to Cowen’s closing share price on March 28, 2017. At Closing, CEFC China would have the right to appoint three directors to Cowen’s Board of Directors, bringing the total number of directors to eleven.

Additionally, CEFC China would, upon closing of the Equity Investment, provide Cowen with the Debt Financing in the form of a senior unsecured loan with a six year maturity. Proceeds of the Equity Investment would be used to repay Cowen’s 8.25% Senior Notes due 2021 and fund growth opportunities at Cowen and its subsidiaries. Proceeds of the Debt Financing would be used for general corporate purposes, including strategic transactions, acquisitions and making investments in Cowen’s business.

“We are pleased to welcome CEFC China as a long-term investor and strategic partner,” said Peter A. Cohen, Chairman and Chief Executive Officer of Cowen. “CEFC China, under the leadership of Chairman Ye Jianming, is a highly-respected global organization with a broad portfolio of successful businesses and an impressive investment track record. We appreciate the culture that CEFC China has created and share similar principles of integrity, honesty and community and in creating an organization where people and ideas thrive. Our two companies have complementary functional expertise, industry focus, geographic coverage and business networks, which creates a unique business development opportunity. This partnership will accelerate growth in Cowen’s core areas of expertise: investment banking, equities, research and investment management.”

Commenting on the investment, Mr. Ye, Chairman of CEFC China, said, “Cowen has long held a reputation for high quality and excellence in the US financial services industry. We highly appreciate and admire the company’s focus on delivering value-added capabilities to their clients. We share Cowen’s core values in corporate development and support the company’s management and team of experts, including its board of directors, who are dedicated to building the premier full service investment bank focused on growth sectors and an investment manager offering differentiated investment capabilities that are highly relevant in today’s market environment. We believe the synergies brought by this strategic partnership can create significant value for our clients and for our respective stakeholders and further promote a deepened cooperation in a number of areas within the US and global capital markets.”

The Equity Investment and the Debt Financing are expected to close concurrently by the end of the third quarter of 2017, subject to receipt of certain regulatory and government approvals, including approval from the Committee on Foreign Investment in the United States and compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of other customary closing conditions.

Starr Strategic Partners, LLC served as financial advisor and Willkie Farr & Gallagher LLP served as legal counsel to Cowen Group.

Lazard served as financial advisor, Skadden, Arps, Slate, Meagher & Flom LLP served as United States legal counsel and King & Wood Mallesons served as PRC legal counsel to CEFC China.

Related News

Database Monitoring Shown to Improve DevOps Success for Financial Services

A newly released Financial Services edition of Redgate’s 2020 State of Database Monitoring Report reveals the sector is outperforming... Read more »

Atos Becomes Strategic Partner of Student Loans Company

The Student Loans Company (SLC) has appointed Atos, a global leader in digital transformation, to support the delivery of improvements to SLC’... Read more »

25,000 People Pre-register for Chip’s Biggest Funding Round Yet

Chip, the automatic saving app offering access to market leading returns, is about to launch its biggest funding round yet to a record number of pre-registrations. The company... Read more »

Apex Partners with Calypso to Provide Middle and Back-office Services to Ardent Financial

Apex Group Ltd. (“Apex”), a global financial services provider, announces today that it has been appointed to provide front to back office solutions to FCA... Read more »

New Free Whitepaper Helps FSI Businesses Achieve Digital Transformation- Fincons Group

Today, Fincons Group, an international system integration consultancy with offices in Italy, Switzerland, the UK, France, the U.S. and Germany, releases a new free guide to... Read more »

Join CNA, Nationwide and Quadient for a C-Suite Take on Results Driven Technology

It has been made abundantly clear that only the most innovative, fast-moving and customer centric carriers will survive. As the spotlight shines on our industry more than ever... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel