Toronto-based Canadian Imperial Bank of Commerce CM is expanding its presence in the United States. The company has inked a deal to acquire Milwaukee, WI-based Cleary Gull Inc., a boutique investment banking firm.
Acquisition of Cleary Gull, which specializes in middle market M&As, private capital placement and debt advisory across the United States, will expand Canadian Imperial’s deal-making capabilities. Notably, the terms of the deal, expected to close in the fourth quarter of 2019, remain undisclosed.
Canadian Imperial already has a U.S. capital markets presence in New York, Chicago and Houston. The company plans to integrate Cleary Gull operations with its existing Chicago-based investment banking division.
Canadian Imperial made Chicago its U.S. headquarters following the acquisition of PrivateBancorp in 2017. Since then, the bank has been pursuing to expand its “capabilities through a highly integrated approach across Commercial Banking, Wealth Management and Capital Markets.”
Michael Capatides, senior executive vice-president and group head, US Region, and president & CEO, CIBC Bank USA, said, “This acquisition is a further investment in our North American platform that will deliver enhanced Capital Markets capabilities for our clients, and support our diversification and growth objectives.”
Further, Ronald Miller, Cleary Gull’s president in the statement said, “With our focus on family and entrepreneur-owned business, as well as private equity firms, we are excited about the opportunities for our clients and our team as part of CIBC's growing business in the US.”
With Canadian Imperial facing a tough operating backdrop in Canada, this deal is expected to support its revenues, which are getting hampered by lower rates and muted loan growth. Also, the company is facing heightening competition from other Canadian banks, including The Toronto-Dominion Bank’s TD, Bank of Montreal BMO and Royal Bank of Canada RY, among others.
Moreover, shares of this Zacks Rank #5 (Strong Sell) company have rallied 5.6% so far this year, underperforming the industry’s rise of 8.6%.
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