HOUSTON, Nov 17 (Reuters) - Piper Jaffray Companies said on Tuesday it has agreed to buy one of Houston’s most respected energy investment banks, Simmons & Co International, for $91 million in cash and $48 million in stock.
Shares of Piper, which said the deal would give it new revenue streams, fell 3.5 percent to $34.61 as oil plumbed six-year lows of around $40 a barrel.
Simmons is one of a handful of boutique investment banks based in Houston or New Orleans that have an outsized influence on research, capital raisings and mergers in the oil and gas industry around the world.
It was founded by Matthew Simmons, who decades after opening the bank became a proponent of the so-called peak oil theory that said the world was running out of crude.
Simmons retired from the bank that kept his name in 2005, but remained affiliated with it in a relationship that was strained at times.
In May 2010, as BP Plc’s ruptured Macondo well gushed crude into the Gulf of Mexico after a deadly blowout, the company’s shares plunged after he said the British oil giant would be bankrupt in a month.
The bank distanced itself from its namesake, saying in a statement to clients that his comments were “discordant with the views of Simmons & Company International.”
In June that year the bank announced Simmons had left the company completely, and Simmons died several weeks later.
Since then, the fracking revolution and other technological advances in the United States unlocked millions of barrels of crude oil from rocky shale formations that previously could not be recovered. BP never filed for bankruptcy. (Reporting By Terry Wade; Editing by Kristen Hays and Andrew Hay)