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To: John Pitera who wrote (2845)	10/31/2005 4:16:24 PM
From: John Pitera	Read Replies (1) \| Respond to of 2850

IX -- Japan's Orix to Buy Houlihan Lokey By DENNIS K. BERMAN Staff Reporter of THE WALL STREET JOURNAL October 31, 2005; Page A11 Boutique investment bank Houlihan Lokey Howard & Zukin is expected to announce its sale to Japan's Orix Corp. for about $500 million, executives at both companies said, pushing the Los Angeles firm deeper into the world of commercial finance. Under the terms of the pact, Houlihan and Orix's U.S. arm will combine their operations into a company with $2.5 billion in assets that will keep the Houlihan name. Orix's U.S. arm will hold 70% of the new company, while Houlihan's partners will own the rest. Houlihan has carved a niche serving middle-market companies with market capitalizations under $1 billion, by advising on merger transactions and helping distressed or bankrupt companies restructure their balance sheets. Orix has a relatively small presence in the U.S., with $4 billion in assets that are primarily used for real estate, corporate and public finance customers. In interviews, Houlihan and Orix officials said they hoped the combined company could more actively serve Houlihan's clients by using financing from Orix, a Japanese firm listed on the New York Stock Exchange with a $16 billion market capitalization. In doing so, the firms are entering a competitive marketplace, where big commercial banks, specialty lenders and even hedge funds are starting to tread. Houlihan and Orix officials acknowledged the competition, but said their opportunity comes from giving smaller companies the financing structures that typically have been the province of huge corporate players. Similarly, the two companies hope the transaction will be a base for Houlihan to continue its international expansion, which already has 10 offices scattered around the globe. The 35-year-old firm has 700 employees and is expected to add jobs as part of the arrangement. Last year Houlihan ranked fifth in the M&A league tables, as measured by deals in which it has advised, and first on all deals worth less than $500 million. Write to Dennis K. Berman at dennis.berman@wsj.com1