BMO expands U.S. capital markets business with acquisition

By John Tilak and Lauren Hirsch

TORONTO/NEW YORK (Reuters) - Bank of Montreal (Toronto:BMO.TO - News) said on Thursday that it would acquire Greene Holcomb Fisher, a U.S. mergers and acquisitions advisory firm, in a push to strengthen its investment banking business in the United States, particularly in the Midwest.

The move will help Toronto-based BMO, Canada's fourth biggest lender, double its U.S. M&A business, based on the number of deals. It takes its U.S. M&A team, which is led by Lyle Wilpon, to 70 members, from 40.

Based in Minneapolis, Greene Holcomb Fisher offers investment banking services targeted at the middle market, an area that converges with BMO's U.S. strategy. It also has offices in Seattle and Atlanta.

In the United States, BMO eyes companies with market capitalizations of $200 million to $5 billion and focuses on seven sectors, including energy, retail, industrials, healthcare and technology.

"It accelerates our M&A business in the U.S.," said Perry Hoffmeister, head of global investment and corporate banking at BMO Capital Markets, in an interview. "It really gets us deeper in our core sectors."

With the deal, BMO expects to sell investment banking services to more lending clients in its commercial banking business in the Midwest, where it has a strong retail banking presence.

BMO, which did not disclose the terms of the deal, said the two firms advised on M&A deals valued at $77 billion in 2015.

BMO did not go hunting for a target, Hoffmeister said. "This acquisition happened to come along," he said, adding that initial discussions with GHF began about a year ago.

The combined operations will enable BMO to better serve and attract private equity clients, said Andre Hidi, global head of M&A at BMO.

"(PE firms) like to get calls from investment banks marketing companies that are a particularly good fit between a firm that the investment bank is selling and one of their portfolio companies," he said.

BMO's capital markets division expanded aggressively in the United States since the financial crisis and has started to see those efforts pay off.

While the U.S. investment banking industry is more competitive than the Canadian market, several European banks have been pulling back and smaller firms have been struggling.

Other Canadian banks that are active in the U.S. investment banking market include RBC (Toronto:RY.TO - News) and TD Bank (Toronto:TD.TO - News).

The deal is expected to close in BMO's fiscal fourth quarter, when GHF will be rebranded as BMO Capital Markets.

(Reporting by John Tilak and Lauren Hirsch; Editing by Bernadette Baum and Tom Brown)