Greenhill launched a leveraged recapitalization to put in place a capital structure designed to enhance long-term shareholder value in the context of its current equity valuation, current tax rates and current opportunities in the credit market. The plan is intended to reduce taxes, increase earnings per share and increase employee alignment with shareholders, while offering those wishing to monetize their shares a significant opportunity for liquidity at a premium to the current share price.

The initial step in the recapitalization is to borrow $300 million under a term loan B (TLB) structure. Goldman Sachs has been engaged to lead the syndication of, and has underwritten, this financing. The TLB is expected to have a five-year term, and other terms of the TLB are being finalized and will be disclosed upon completion.

The net proceeds from the TLB financing, together with equity sale proceeds, will be used to repay all of the firm’s existing bank debt and to help fund the repurchase of up to $235 million of shares. To effect such repurchase, the firm expects to shortly commence a tender offer to repurchase nine million shares (approximately 30% of shares outstanding) at a fixed price of $17.00 per share (an 18% premium to the closing price on September 25, 2017), conditional on completion of the TLB financing.

For the firm, the plan should result in reduced corporate income taxes, higher earnings per share and an increased opportunity for value creation through accessing the credit as well as equity markets.

“Given recent developments in the credit and equity markets, we now believe we can better maximize shareholder value by accessing credit as well as equity markets and implementing a more tax efficient structure,” said Scott L. Bok, CEO.

Greenhill is an independent investment bank entirely focused on providing financial advice on significant mergers, acquisitions, restructurings, financings and capital raising to corporations, partnerships, institutions and governments globally.