Houlihan Lokey Shares Rise in Trading Debut

Shares of Houlihan Lokey Inc. rose in their trading debut Thursday, a day after the boutique investment bank priced its smaller-than-planned initial public offering below expectations.

The IPO for Houlihan Lokey sold fewer shares than planned at a lower price than anticipated. It raised $220.5 million for selling shareholders, which included Orix USA, the U.S. arm of Japanese investment conglomerate Orix Corp., and company executives and directors. They sold 10.5 million shares at $21 apiece. They had planned to sell 13.1 million shares at $22 to $24 apiece, according to regulatory filings.

Houlihan Lokey's stock opened trading on the New York Stock Exchange under the symbol "HLI" at $22.75, 8.3% above its IPO price.

The deal was led by Bank of America Merrill Lynch and Goldman Sachs.

Houlihan Lokey makes money by advising companies on mergers and acquisitions and other transactions as well as by advising companies on bankruptcies and restructuring and giving fairness opinions in connection with mergers and other transactions.

Its IPO comes amid increasing demand for advice on mergers and acquisitions. This year, global mergers and acquisitions are on pace to hit the highest level on record.

In recent trading Houlihan Lokey's stock rose 9% to $22.88. It follows a string of stumbles by newly-listed companies.

The average one-day pops for U.S.-listed IPOs is 6.7% for the companies that made their debut in August, according to Dealogic. That is below the average 15% rise for 2015 and is down from 16% for companies that went public in July, according to Dealogic.

Last week there were several high-profile stumbles, including a big first-day fall by consumer brand Amplify Snack Brands Inc., which had priced above expectations. Separately, Planet Fitness Inc.'s stock spent most of its first day of trading in the red before closing the day flat.

Write to Corrie Driebusch at [e-mail]

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