Perella Weinberg adds energy prowess by acquiring Tudor Pickering

Perella Weinberg Partners agreed to buy energy banker Tudor Pickering Holt, paving the way for more deal-making in the oil and gas sectors for the New York firm.

While the deal promises to quickly build out Perella Weinberg’s investment-banking business, Tudor Pickering Holt could also help PWP’s private equity deal-makers make inroads into energy deals at a time when valuations in the sector are more reasonable, a source said.

Perella Weinberg has invested as a GP in heavy-industry companies, but it’s had limited or no exposure to the energy sector. Now it’s aiming at energy-adjacent sectors, such as chemicals and diversified industrials, the firm said.

Among its PE funds, Perella Weinberg raised $600 million in 2014 for PWP Growth Equity, which focuses on consumer, services and industrial. The firm drew in $778 million for Perella Weinberg Real Estate Fund II in 2011, Thomson One Banker says.

Reports that Perella Weinberg and Tudor Pickering Holt might merge initially surfaced in April. The link was seen as a way for the firms to bulk up, when depressed energy prices had cooled deal-making as companies struggled with weakened balance sheets.

In addition, Tudor Pickering Holt and Perella Weinberg both handle banking and other services tied to restructurings, which remain an active part of the market.

The deal is expected to close in Q4. Perella Weinberg would then move into 2017 with $12 billion in assets under management and about 650 employees, including about 170 from Tudor Pickering Holt.

In a joint statement, Perella Weinberg cited several of Tudor Pickering Holt’s recent milestones, including the Houston firm’s role in Encana’s $7.1 billion acquisition of Athlon, Statoil’s $4.7 billion purchase of Brigham, and Felix’s $1.9 billion sale to Devon Energy.

Tudor Pickering Holt also runs a special-committee practice and a capital-markets team that underwrites stock offerings, and it has expertise in cross-border energy ventures.

The deal also is the latest among occasional boutique-investment-bank acquisitions. Piper Jaffray bought Simmons & Co International for about $139 million in 2015.

Also last year, Stifel Financial bought Sterne Agee Group for $150 million in cash. In 2013, Stifel bought KBW for about $575 million in cash and stock.

Action Item: Deal announcement: www.tphco.com/perella-weinberg-partners-tudor-pickering-holt-co-combine

Joe Perella, founding partner and chairman of Perella Weinberg Partners. Photo courtesy of the firm.