Houlihan Lokey to Form New Partnership in South Korea

Los Angeles-based Houlihan Lokey Howard & Zukin is expected to announce Tuesday that it has bought a 50% stake in an affiliate of a leading South Korean financial firm and is forming a new company there.

The move echoes those already taken by some of Wall Street's largest financial firms, all of which are attempting to take advantage of opportunities in the distressed Asian marketplace.

Privately held Houlihan Lokey, an investment-banking and advisory firm long known for its expertise in valuing businesses, has in recent years expanded into financial restructurings along with mergers and acquisitions.

It has more than 350 employees in 11 offices and 5,000 clients.

Houlihan Lokey has agreed to partner for an undisclosed sum with Samjong M&A Finance, an affiliate of Samjong Group, both of which are based in Seoul, to create a jointly owned firm to be called Samjong Houlihan Lokey. The new firm, which would supersede Samjong M&A Finance, would specialize in financial restructuring services for the many highly leveraged companies in South Korea now suffering because of the Asian debt and currency crises.

"From our point of view, our experience from hundreds of North American restructurings and financial valuations, together with Samjong's knowledge of the Korean insolvency process, will provide the first locally supported and highly sophisticated financial restructuring services in Korea," said James H. Zukin, who would serve as chairman of Samjong Houlihan Lokey.

"We can't do this without them. They need to translate how we do financial restructurings and [apply it] it to the needs of the local market," Zukin said.

The new partnership would also provide private equity and debt placements to South Korean clients, real estate and financial workout services and also specialized due diligence and analytical support services.

In addition, Houlihan would function as a new bridge between South Korean businesses and Southern California firms that are either owned by South Koreans or are interested in doing business there, Zukin said.

"We are finding that more U.S. investors are looking to partner or buy a majority stake in businesses in Korea," he said. "We are also working with U.S. firms that are buying out their Korean partners."

Samjong M&A Finance, founded in 1997, provides investment banking services in South Korea. The Samjong group of companies has more than 250 employees in that country.