China Energy Company (CEFC China) has agreed to acquire a 19.9% stake in New York-based diversified financial services firm Cowen Group for $100m.
Cowen offers alternative asset management, investment banking, research, sales and trading and prime brokerage services. The company operates through two business units, Ramius and its affiliates that comprise the alternative investment segment and Cowen and Company and its affiliates that comprise the broker-dealer segment.
Under the terms of the deal, CEFC will pay $18 for each Cowen Class A share. At the same time, CEFC also agreed to offer $175m in debt financing to the US firm with a six year maturity period.
Proceeds from the sale will be used by Cowen to repay its debt and fund growth plans, while the debt financing will used for general corporate purposes such as strategic transactions, and acquisitions.
CEFC will also have the right to appoint three directors to Cowen’s board as part of the deal.
CEFC chairman Ye Jianming said: “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 transaction is expected to be completed by the third quarter of 2017, subject to regulatory and government approvals.
Cowen chairman and CEO Peter Cohen added: “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.”