Houlihan Lokey Inc. completed its integration of GCA Corp. in early December 2021, officially sealing a record-setting acquisition for the company that has formed "an incredibly powerful combination for our clients," Houlihan Lokey co-President Scott Adelson said in an interview.

"We went from being meaningfully underweighted in technology to literally, on a combined basis overnight, the most active technology investment bank on the planet," Adelson said.

Houlihan Lokey co-President Scott Adelson said the company has created "an incredibly powerful combination" with GCA Corp. Source: Houlihan Lokey Inc.

The $561 million acquisition, which was announced Aug. 2, 2021, and served as the largest transaction in Houlihan Lokey’s history, seemed to be years in the making.

"When we made the Leonardo & Co. SpA acquisition [in 2015], Leonardo was actually partners with GCA ... we heard about what great people they were and got introduced to Aki Watanabe, who was the founder [of GCA], and just began a dialogue and it was years prior to [that] transaction actually occurring," Adelson said.

It was not until relatively recently, however, that GCA began to explore a possible sale.

"I think from our perspective, our business had grown pretty dramatically post-COVID with the focus on technology and we felt that the business had scaled very quickly, and we had the choice of either investing really heavily in our own platform to go through the next stage of growth or to partner with someone who brought that platform with them," GCA Director Phil Adams said in an interview.

GCA ultimately made the decision to find a partner and, after exploring a potential deal with Houlihan Lokey, both sides were intrigued as they each recognized the lack of overlap between the two companies and the massive potential that could arise with a partnership.

"We saw that there was very little crossover … you weren't looking at anything like we've got two teams doing the exact same thing and therefore it's a problem," Adams said. "It felt like the origins of their business were similar to ours and it just felt like putting the two together created a real kind of mid-market powerhouse."

"The lack of overlap is fantastic," Adelson said. "We also take all the technology expertise and knowledge that is resonate with GCA and now are able to couple that with market expertise in virtually every sector."

Adelson was also interested by the potential impact that a partnership would have on international markets, including Europe and Asia, as GCA is headquartered in Tokyo.

"Look at Europe. We were clearly an up-and-comer ... and in one fell swoop, we are now the second-most active adviser in Europe. ... And they give us a foothold in Asia in a much more meaningful way than we had before," Adelson said.

"When you put the two organizations together, we become incredibly strong on a U.S. and European basis at a scale that really can't be matched," Adelson added.