Banco Santander, through the American company Santander Holdings USA, has bought the independent American fixed income broker Amherst Pierpont Securities for 590 million dollars (about 500 million euros). As reported by the bank this Thursday to the National Securities Market Commission (CNMV), the operation has been carried out through the acquisition of the broker’s parent company, Pierpont Capital Holdings, and is expected to close in the first quarter of 2022 after obtain the corresponding regulatory approvals.
Amherst Pierpont will become part of Santander Corporate & Investment Banking, the global wholesale banking division of the Spanish bank, thus expanding its capabilities in structured products, fixed income distribution and securitisations. The operation is expected to increase the group’s earnings per share by around 1% and generate a return on invested capital close to 11% in the third year after incorporation, after synergies, with a negative impact of 9 basis points on the group’s capital at the close of the transaction.
Amherst Pierpont acts as an independent intermediary for fixed income and structured products in the United States, in addition to being designated by the Federal Reserve of New York as primary dealer (lead operator) of US Treasuries in 2019. It is one of three US non-banks with that designation. The US broker has around 230 employees and more than 1,300 institutional clients and has offices in New York (where its headquarters are), Chicago, San Francisco and Hong Kong.
Since 2016, Amherst Pierpont has had an ROE (return on capital) close to 15%, which reached 28% in 2020. The president of Banco Santander, Ana Botín, assures in the statement sent to the CNMV that the purchase complements the offer of the group, with whose strategy “fits perfectly”, and will allow it “to strengthen relationships with corporate and institutional clients.” Wachtell, Lipton, Rosen & Katz and WilmerHale have been Santander’s legal advisers for this operation. For its part, Barclays has been Amherst Pierpont’s financial advisor, while Shearman & Sterling has been its legal advisor.