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Filed pursuant to
Rule 424(b)(3)
Registration
No. 333-163166
Prospectus Supplement to Prospectus dated November 18,
2009.
2,500,000 Shares
Greenhill & Co.,
Inc.
Common Stock
All of the shares of our common stock in this offering are being
sold by the selling stockholders identified in this prospectus
supplement. We will not receive any of the proceeds from the
sale of the shares of our common stock being sold by the selling
stockholders.
Our common stock is listed on the New York Stock Exchange under
the symbol “GHL”. The last reported sale price of our
common stock on November 17, 2009 was $86.88 per share.
Investing in our common stock involves certain risks. See
“Risk Factors” beginning on page 6 of our annual
report on
Form 10-K
for the year ended December 31, 2008, which is incorporated
by reference into the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities, or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Goldman, Sachs & Co. has agreed to purchase the common
stock from the selling stockholders at a price of $82.536 per
share, which will result in $206,340,000 of proceeds to the
selling stockholders.
Goldman, Sachs & Co. may offer the common stock from
time to time for sale in one or more transactions on the New
York Stock Exchange, in the
over-the-counter
market, through negotiated transactions or otherwise at market
prices prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices.
Upon completion of this offering, our employees and their
affiliated entities will collectively own 23.5% of the total
shares of our common stock outstanding.
Goldman, Sachs & Co. expects to deliver the shares against
payment in New York, New York on November 23, 2009.
Goldman, Sachs &
Co.
Prospectus Supplement dated November 18, 2009.
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ABOUT THIS
PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this offering
of our common stock. The second part, the accompanying
prospectus, gives more general information about the common
stock certain of our stockholders may offer from time to time.
If there is any inconsistency between the information in this
prospectus supplement and the accompanying prospectus, you
should rely on the information in this prospectus supplement.
The terms “Greenhill,” the “Company,”
“the firm,” “we,” “us,” and
“our” refer to Greenhill & Co., Inc. and,
unless the context otherwise requires, its consolidated
subsidiaries.
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this
prospectus supplement or the accompanying prospectus. You must
not rely on any unauthorized information or representations.
This prospectus supplement is an offer to sell only the shares
offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information
contained in this prospectus supplement is current only as of
its date.
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PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights information contained elsewhere in
this prospectus supplement and the accompanying prospectus. This
summary does not contain all of the information you should
consider before investing in our common stock. You should read
this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference carefully, especially the
risks of investing in our common stock discussed in the
incorporated documents.
Greenhill
Overview
Greenhill is an independent investment banking firm that
(i) provides financial advice on significant mergers,
acquisitions, restructurings and similar corporate finance
matters as well as fund placement services for private equity
and other financial sponsors and (ii) manages merchant
banking funds and similar vehicles and commits capital to those
funds and vehicles. We act for clients located throughout the
world from offices in New York, London, Frankfurt, Toronto,
Tokyo, Chicago, Dallas, Houston, Los Angeles and
San Francisco.
We were established in 1996 by Robert F. Greenhill, the former
President of Morgan Stanley and former Chairman and Chief
Executive of Smith Barney. Since its founding, Greenhill has
grown steadily, recruiting a number of managing directors from
major investment banks (as well as senior professionals from
other institutions), with a range of geographic, industry or
transaction specialties and different sets of corporate
management and other relationships. As part of this expansion,
we opened a London office in 1998, raised our first merchant
banking fund in 2000, opened a Frankfurt office later in 2000
and began offering financial restructuring advice in 2001. On
May 11, 2004, we converted from a limited liability company
to a corporation and completed an initial public offering of our
common stock. We opened our Dallas office and completed the
closing of our second merchant banking fund in 2005. We opened
our Toronto office and completed the final closing of our first
venture capital fund in 2006. In 2007, we completed the final
closing of our first European merchant banking fund. We
completed the initial public offering of our special purpose
acquisition company, GHL Acquisition Corp. (“GHLAC”),
in February 2008, opened our San Francisco office in April
2008, launched our Fund Placement Advisory Group in May
2008, opened our Tokyo office in October 2008 and opened our
Chicago office in December 2008. In the first nine months of
2009, we announced the formation of our Financing
Advisory & Restructuring Group in New York and London,
opened our Los Angeles and Houston offices and announced the
recruitment of 14 managing directors who bring us additional
sector expertise in financial services, infrastructure,
insurance, energy, consumer and retail, and gaming and lodging.
In October 2009, we announced the separation of our merchant
banking business. As of September 30, 2009, we employed 69
managing directors and senior advisors globally. We expect to
seek to continue to add industry-focused senior employees and to
expand geographically.
Principal Sources
of Revenue
Our principal sources of revenue are financial advisory services
and merchant banking.
Financial
Advisory Revenue
Our financial advisory business consists of mergers and
acquisitions, financing advisory and restructuring, and fund
placement advisory. For all of our financial advisory services,
we draw on the extensive experience, corporate relationships and
industry expertise of our managing directors and senior advisors.
On mergers and acquisitions engagements, we provide a broad
range of advice to global clients in relation to domestic and
cross-border mergers, acquisitions, and similar corporate
finance matters and are generally involved at each stage of
these transactions, from initial structuring to final
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execution. Our focus is on providing high-quality advice to
senior executive management and boards of directors of prominent
large and mid-cap companies in transactions that typically are
of the highest strategic and financial importance to those
companies. We advise clients on strategic matters, including
acquisitions, divestitures, defensive tactics, special committee
assignments and other important corporate events. We provide
advice on valuation, tactics, industry dynamics, structuring
alternatives, timing and pricing of transactions, and financing
alternatives. Where requested to do so, we may provide an
opinion regarding the fairness of a transaction.
In our financing advisory and restructuring practice, we advise
debtors, creditors and companies experiencing financial distress
as well as potential acquirors of distressed companies and
assets. We provide advice on valuation, restructuring
alternatives, capital structures, and sales or
recapitalizations. We also assist those clients who seek
court-assisted reorganizations by developing and seeking
approval for plans of reorganization as well as the
implementation of such plans.
In our fund placement advisory practice we assist private equity
funds and other financial sponsors in raising capital from a
global set of institutional and other investors.
Financial advisory revenues accounted for 66%, 98% and 92% of
our revenues in the nine months ended September 30, 2009
and in fiscal years 2008 and 2007, respectively.
Non-U.S. clients
are a significant part of our business, generating 26%, 53% and
64% of our financial advisory revenues for the nine months ended
September 30, 2009 and in fiscal years 2008 and 2007,
respectively. We generate revenues from our financial advisory
services by charging our clients fees consisting principally of
fees paid upon the commencement of an engagement, fees paid upon
the announcement of a transaction, fees paid upon the successful
conclusion of a transaction or closing of a fund and, in
connection principally with restructuring assignments, monthly
retainer fees.
Merchant Banking
and Other
Our merchant banking activities currently consist primarily of
management of and investment in Greenhill’s merchant
banking funds, Greenhill Capital Partners I (or “GCP
I”), Greenhill Capital Partners II (or “GCP
II” and, collectively with GCP I, “Greenhill
Capital Partners” or “GCP”), Greenhill SAV
Partners (or “GSAVP”) and Greenhill Capital Partners
Europe (or “GCP Europe”), which are families of
merchant banking funds that invest in portfolio companies.
Merchant banking funds are private investment funds raised from
contributions by qualified institutional investors and
financially sophisticated individuals. The funds generally make
investments in non-public companies, typically with a view
toward divesting within 3 to 5 years. We intend to
separate our merchant banking business over time and in that
connection have recently agreed to sell the right to launch
successor funds to our merchant banking funds and certain other
rights to GCP’s management. See
“— Separation from Merchant Banking
Activities”.
GCP typically makes controlling or influential minority
investments of $10 million to $75 million in companies
with valuations that are between $50 million and
$500 million at the time of investment. GCP has invested a
substantial portion of its capital in the energy, financial
services and telecommunications industries. GSAVP typically
makes smaller investments in early-growth-stage companies that
offer technology-enabled or business information services. Such
investments typically involve higher levels of risk and are more
speculative than our GCP investments. GCP Europe typically makes
controlling or influential minority investments of
£10 million to £30 million in companies with
valuations that are between £50 million and
£250 million at the time of investment.
Merchant banking and other revenue accounted for 34%, 2% and 8%
of our revenues in the nine months ended September 30, 2009
and in fiscal years 2008 and 2007, respectively. We expect these
numbers will decline over the coming years as we transition out
of the business. We generate merchant banking revenue from
(i) management fees paid by the funds we manage,
(ii) gains (or losses) on our investments in the merchant
banking funds and other principal investment activities,
including GHLAC, and (iii) merchant banking profit
overrides. We charge management fees in GCP II, GSAVP and GCP
Europe to all investors except the firm. In GCP I, we
charge management fees to all outside investors who are not
employed or affiliated with us. We may also generate gains (or
losses)
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from our capital investment in our merchant banking funds
depending upon the performance of the funds. Our investments in
our merchant banking funds generate realized and unrealized
investment gains (or losses) based on our allocable share of
earnings generated by the funds. As the general partner of our
merchant banking funds we make investment decisions for the
funds and are entitled to receive an override on the profits of
the funds after certain performance hurdles are met.
In 2007, we formed GHL Acquisition Corp. (“GHLAC”), a
special purpose acquisition company, which completed an initial
public offering in early 2008. On September 29, 2009, the
firm announced that GHLAC completed its acquisition of Iridium
Holdings LLC. The combined company has been renamed Iridium
Communications Inc. (NASDAQ: IRDM, IRDMW, IRDMU, IRDMZ)
(“Iridium”). Following the conversion of the
firm’s convertible note in Iridium in the fourth quarter of
2009, the firm owns 8,924,016 shares of Iridium common
stock and warrants to purchase 4,000,000 additional shares of
common stock of Iridium at $11.50 per share, each of which is
restricted from sale for one year from the acquisition date (or
six months in the case of a registered offering). Upon
completion of the acquisition of Iridium by GHLAC, the
firm’s fully diluted ownership in Iridium is approximately
12%.
Separation from
Merchant Banking Activities
On October 28, 2009, we entered into a Memorandum of
Agreement with Robert H. Niehaus (the “Memorandum of
Agreement”) and agreed to sell to an entity newly formed by
Mr. Niehaus (the “NewCo”) the right to raise
subsequent merchant banking funds, the right to use the track
record for the GCP funds, and portions of the partnership
interests entitled to carried interest allocations for a
purchase price of $25.0 million, payable principally in
Greenhill common stock. We also agreed to grant NewCo an
exclusive license to use the name “Greenhill Capital
Partners” in connection with certain successor funds to the
GCP funds. Mr. Niehaus is an executive officer of the firm
and the chairman of Greenhill Capital Partners. Existing GCP
funds will continue to be managed by us through Mr. Niehaus
and other current personnel until such persons are transitioned
at a later date to the purchasing entity. As a result of the
transaction, we will transition out of merchant banking
activities over time. We will retain our portfolio of principal
investments. This transaction is expected to close in the fourth
quarter of 2009.
We will retain the right to collect all management, monitoring,
transaction, investment and other fees payable in respect of the
existing GCP funds, but it is expected that those fees will be
used in their entirety to pay the costs (including compensation)
of the management of the GCP funds. Newco will be entitled to
collect and retain all management, monitoring, transaction,
investment and other fees payable in respect of the Greenhill
Capital Partners III, L.P. and Greenhill SAVP II, L.P.
(collectively, the “New Funds”).
We will be entitled to receive carried interest payable in
connection with existing or future investments made in 2009 by
the existing GCP funds, and such carried interest will be
allocated as follows: Carried interest allocated to the firm for
the existing GCP funds in respect of all years prior to and
including 2009 will remain in effect and subject to existing
terms. We will also be entitled to receive 1 out of 20 points of
carried interest in respect of all investments made by the
existing GCP funds on or after January 1, 2010 and all
investments made by the New Funds and an additional 1 point of
carried interest in each such investment in which certain of our
employees in the reasonable judgment of Mr. Niehaus plays a
material role in originating the investment or, if requested by
Mr. Niehaus, in the oversight of the investment.
Until the formal separation of GCP from Greenhill,
Mr. Niehaus and all other employees engaged in the
management of the existing GCP funds (the “GCP
Employees”) will remain employees of the firm and will
retain their existing rights and responsibilities.
Our principal executive offices are located at 300 Park Avenue,
23rd
Floor, New York, New York 10022, and our telephone number is
(212) 389-1500.
We maintain a website at www.greenhill.com where general
information about us is available. We are not incorporating the
contents of the website into this prospectus supplement.
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THE
OFFERING
|
Common stock offered by the selling stockholders
|
2,500,000 shares | |
|
Common stock outstanding after this offering(1)
|
28,244,854 shares | |
|
Voting rights
|
One vote per share | |
|
Use of proceeds
|
We will not receive any proceeds from this offering. | |
|
Dividend policy
|
In January 2009, our Board of Directors declared a dividend of $0.45 per share, which was paid on March 18, 2009 to stockholders of record as of March 4, 2009; in April 2009, our Board of Directors declared a dividend of $0.45 per share, which was paid on June 10, 2009 to stockholders of record as of May 27, 2009; in July 2009, our Board of Directors declared a dividend of $0.45 per share, which was paid on September 16, 2009 to stockholders of record as of September 2, 2009, and in October 2009, our Board of Directors declared a dividend of $0.45 per share, which is payable on December 16, 2009 to stockholders of record as of December 2, 2009. Purchasers of common stock in this offering will be entitled to receive the declared and unpaid dividend in December 2009 if they are stockholders of record as of December 2, 2009. The declaration of any future dividends and, if declared, the amount of any such dividends, will be subject to our actual future earnings and capital requirements and to the discretion of our Board of Directors. For a discussion of the factors that will affect the determination by our Board of Directors to declare dividends, see “Dividend Policy”. | |
| New York Stock Exchange symbol | GHL |
| (1) | The number of shares of common stock that will be outstanding after this offering is based on the number of shares outstanding at November 10, 2009; and excludes: |
| • | 154,774 non-voting exchangeable shares, which are exchangeable into the same number of shares of common stock of the Company, subject to certain conditions, and 2,582,699 unvested restricted stock units, which vest over time and represent a right to a future payment equal to one share of common stock per restricted stock unit. |
Except as otherwise indicated, all amounts with respect to the
volume, number and market share of mergers and acquisitions
transactions and related ranking information incorporated by
reference into this prospectus supplement or the accompanying
prospectus have been derived from information compiled and
classified by Thomson Financial.
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USE OF
PROCEEDS
The selling stockholders will receive all of the net proceeds
from the sale of the shares of common stock offered hereby. We
will not receive any proceeds from the offering contemplated by
this prospectus supplement.
DIVIDEND
POLICY
Dividends declared per common share were $1.80 in the aggregate
in 2008. Dividend equivalents of $3.4 million were recorded
in 2008 on the restricted stock units that are expected to vest.
Additionally, in January 2009, April 2009, July 2009 and October
2009, our Board of Directors declared separate quarterly
dividends of $0.45 per share, for an aggregate of $1.80 per
share. The dividend declared in October 2009 is payable on
December 16, 2009 to stockholders of record as of
December 2, 2009. Purchasers of common stock in this
offering will be entitled to receive the declared and unpaid
dividend in December 2009 if they are stockholders of record as
of December 2, 2009.
The declaration of any dividend and, if declared, the amount of
any such dividend, will be subject to our actual future earnings
and capital requirements and to the discretion of our Board of
Directors. Our Board of Directors will take into account such
matters as general business conditions, our financial results,
capital requirements, contractual, legal and regulatory
restrictions on the payment of dividends by us to our
stockholders or by our subsidiaries to us, and such other
factors as our Board of Directors may deem relevant.
CAPITALIZATION
The following table sets forth our capitalization as of
September 30, 2009. This table should be read in
conjunction with “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and the
consolidated financial statements and notes thereto included in
each of our annual report on
Form 10-K
for the year ended December 31, 2008 and our quarterly
report on
Form 10-Q
for the three months ended September 30, 2009, each of
which is incorporated by reference in this prospectus
supplement. Our capitalization will not be affected by this
offering.
|
As of |
||||
|
September 30, 2009
|
||||
|
Cash and cash equivalents
|
$ | 58,581,450 | ||
|
Bank loan payable
|
33,600,000 | |||
|
Stockholders’ equity:
|
||||
|
Common stock, par value $0.01 per share; 100,000,000 shares
authorized, 33,209,828 shares issued and outstanding(1)
|
332,098 | |||
|
Restricted stock units
|
78,447,709 | |||
|
Additional paid-in capital
|
230,195,469 | |||
|
Exchangeable shares of subsidiary; 257,156 shares issued
and 154,774 outstanding
|
9,240,008 | |||
|
Retained earnings
|
201,931,396 | |||
|
Accumulated other comprehensive income (loss)
|
(9,392,881 | ) | ||
|
Treasury stock, at cost, par value $0.01 per share;
4,978,981 shares
|
(268,250,489 | ) | ||
|
Total stockholders’ equity
|
242,503,310 | |||
|
Total capitalization
|
$ | 276,103,310 | ||
| (1) | Includes 4,978,981 shares repurchased and held in treasury as of September 30, 2009. |
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SELLING
STOCKHOLDERS
Managing directors and senior advisors of Greenhill or their
affiliates are offering the 2,500,000 shares of common
stock being offered hereby.
The following table sets forth as of the date of this prospectus
supplement certain information regarding the number of shares of
common stock to be sold in this offering by each selling
stockholder and each selling stockholder’s beneficial
ownership of our common stock:
| • | immediately prior to the consummation of this offering; and | |
| • | as adjusted to reflect the sale of the shares of our common stock by the selling stockholders. |
Each selling stockholder is a managing director or a senior
advisor of Greenhill or an affiliate thereof. In accordance with
the rules of the Securities and Exchange Commission,
“beneficial ownership” includes voting or investment
power with respect to securities. The percentage of beneficial
ownership reflected in the following table is based on
28,244,854 shares of common stock outstanding as of
November 10, 2009. The address for each listed stockholder
is:
c/o Greenhill &
Co., Inc., 300 Park Avenue, 23rd Floor, New York, New York
10022. To our knowledge, except as indicated in the footnotes to
this table and pursuant to applicable community property laws,
the persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially
owned by them.
|
Shares Beneficially |
Shares of Common |
Shares Beneficially |
||||||||||||||||||||||
|
Owned Before This |
Stock to |
Owned |
||||||||||||||||||||||
| Offering | be Sold | After Offering | ||||||||||||||||||||||
|
Selling Stockholders
|
Number
|
Percent
|
Number
|
Percent
|
Number
|
Percent
|
||||||||||||||||||
|
Robert F. Greenhill(1)
|
2,988,095 | 10.6% | 842,483 | 3.0% | 2,145,612 | 7.6% | ||||||||||||||||||
|
Scott L. Bok(2)
|
941,718 | 3.3% | 265,514 | 0.9% | 676,204 | 2.4% | ||||||||||||||||||
|
Simon A. Borrows
|
947,186 | 3.4% | 267,056 | 0.9% | 680,130 | 2.4% | ||||||||||||||||||
|
Robert H. Niehaus(3)
|
705,384 | 2.5% | 197,612 | 0.7% | 507,772 | 1.8% | ||||||||||||||||||
|
Timothy M. George(4)
|
926,143 | 3.3% | 261,123 | 0.9% | 665,020 | 2.4% | ||||||||||||||||||
|
James R. C. Lupton(5)
|
934,972 | 3.3% | 263,613 | 0.9% | 671,359 | 2.4% | ||||||||||||||||||
|
Jeffrey F. Buckalew(6)
|
108,107 | 0.4% | 30,481 | 0.1% | 77,626 | 0.3% | ||||||||||||||||||
|
Brian J. Cassin(7)
|
140,726 | 0.5% | 39,677 | 0.1% | 101,049 | 0.4% | ||||||||||||||||||
|
Bradley J. Crompton(8)
|
77,387 | 0.3% | 21,819 | 0.1% | 55,568 | 0.2% | ||||||||||||||||||
|
Ulrika Ekman
|
19,332 | 0.1% | 5,451 | — | 13,881 | — | ||||||||||||||||||
|
Richard J. Lieb
|
18,804 | 0.1% | 5,302 | — | 13,502 | — | ||||||||||||||||||
|
Gregory R. Miller
|
75,868 | 0.3% | 21,391 | 0.1% | 54,477 | 0.2% | ||||||||||||||||||
|
Richard Morse
|
122,541 | 0.4% | 34,550 | 0.1% | 87,991 | 0.3% | ||||||||||||||||||
|
V. Frank Pottow
|
87,025 | 0.3% | 21,717 | 0.1% | 65,308 | 0.2% | ||||||||||||||||||
|
Gregory G. Randolph(9)
|
80,149 | 0.3% | 22,598 | 0.1% | 57,551 | 0.2% | ||||||||||||||||||
|
Bradley A. Robins
|
116,846 | 0.4% | 32,944 | 0.1% | 83,902 | 0.3% | ||||||||||||||||||
|
Harold J. Rodriguez, Jr.(10)
|
72,285 | 0.3% | 10,000 | — | 62,285 | 0.2% | ||||||||||||||||||
|
Colin T. Roy
|
414,284 | 1.5% | 116,806 | 0.4% | 297,478 | 1.1% | ||||||||||||||||||
|
David Wyles
|
141,384 | 0.5% | 39,863 | 0.1% | 101,521 | 0.4% | ||||||||||||||||||
|
Total
|
8,918,236 | 31.6% | 2,500,000 | 8.9% | 6,418,236 | 22.7% | ||||||||||||||||||
| (1) | Robert F. Greenhill’s beneficial ownership is calculated by attributing to him all shares of our common stock he owns as well as those that are owned by two entities controlled by him. The first entity is Greenhill Family Limited Partnership, a Delaware limited partnership, which owns 2,380,787 of our shares, of which 678,209 shares will be sold in this offering. The second entity is Riversville Aircraft Corporation II, a Delaware corporation, which owns 576,669 of our shares, of which 164,274 shares will be sold in this offering. Mr. Greenhill expressly disclaims beneficial |
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| ownership of the shares of common stock held by members of his family in Greenhill Family Limited Partnership. | ||
| (2) | Includes 265,360 shares owned by the Bok Family Foundation, of which 39,827 shares will be sold by the Bok Family Foundation in this offering. | |
| (3) | Includes 247,076 shares held by the Robert H Niehaus 2008 GRAT (the “Niehaus 2008 GRAT”), of which 131,741 shares will be sold by the Niehaus 2008 GRAT in this offering. It also includes 20,000 shares owned by the Robert H. Niehaus and Kate Niehaus Foundation and 4,500 shares held in three trusts of which Mr. Niehaus’ children are beneficiaries. Mr. Niehaus expressly disclaims beneficial ownership of the 4,500 shares of common stock held by the trusts and the Niehaus 2008 GRAT except to the extent of his pecuniary interest therein. | |
| (4) | Includes 81,854 shares held in two trusts, Timothy George May 7, 2004 Descendants Trust and Timothy George GRAT No. 2, of which Mr. George is a co-trustee. The trusts will sell in aggregate 23,078 shares in this offering. | |
| (5) | Includes 236,430 shares owned by Mr. Lupton’s wife. | |
| (6) | Includes 9,000 shares owned by the Buckalew Family Foundation, of which 3,000 shares will be sold by the Buckalew Family Foundation in this offering. | |
| (7) | Includes 60,000 shares owned by a trust established for the benefit of Mr. Cassin and his family. Mr. Cassin disclaims beneficial ownership of the shares held in the trust. | |
| (8) | Mr. Crompton currently holds 77,387 shares of non-voting exchangeable shares issued by our Canadian subsidiary, which are exchangeable into the same number of shares of our common stock subject to certain conditions. | |
| (9) | Includes 275 shares transferred to the Convent of the Sacred Heart, all of which are being sold in this offering. | |
| (10) | Includes 72,285 shares owned by Mr. Rodriguez’s wife, of which 10,000 shares will be sold in this offering. |
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CERTAIN MATERIAL
U.S. FEDERAL TAX CONSEQUENCES
The following discussion describes certain material
U.S. federal income and estate tax consequences of the
ownership and disposition of our common stock. This discussion
applies only to holders that hold shares of our common stock as
capital assets.
This discussion does not describe all of the tax consequences
that may be relevant to a holder in light of its particular
circumstances or to holders subject to special rules, such as:
| • | certain financial institutions; | |
| • | insurance companies; | |
| • | dealers and certain traders in securities; | |
| • | persons holding our common stock as part of a “straddle,” “hedge,” “conversion” or similar transaction; | |
| • | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; | |
| • | holders that own, or that are deemed to own, more than 5% of our common stock; | |
| • | certain former citizens or residents of the United States; | |
| • | partnerships or other entities classified as partnerships for U.S. federal income tax purposes; or | |
| • | persons subject to the alternative minimum tax. |
This discussion is based on the Internal Revenue Code of 1986,
as amended (the “Code”), and administrative
pronouncements, judicial decisions and final, temporary and
proposed Treasury Regulations, changes to any of which
subsequent to the date of this prospectus supplement may affect
the tax consequences described herein. This discussion does not
address all aspects of U.S. federal taxation that may be
relevant to holders in light of their particular circumstances
and does not address any tax consequences arising under the laws
of any state, local or foreign jurisdiction. Prospective holders
are urged to consult their tax advisors with respect to the
particular tax consequences to them of owning and disposing of
common stock, including the consequences under the laws of any
state, local or foreign jurisdiction.
Tax Consequences
to U.S. Holders
As used herein, the term “U.S. holder” means a
beneficial owner of our common stock that is, for
U.S. federal income tax purposes:
| • | a citizen or resident of the United States; | |
| • | a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or of any political subdivision thereof; or | |
| • | an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. |
Taxation of
Distributions on Common Stock
Distributions paid on our common stock, other than certain pro
rata distributions of shares of common stock, will be treated as
dividends to the extent paid out of current or accumulated
earnings and profits (as determined under U.S. federal
income tax principles) and will be includible in income by the
U.S. holder and taxable as ordinary income when actually or
constructively received. If a distribution exceeds our current
and accumulated earnings and profits, the excess will be first
treated as a tax-free return of the U.S. holder’s
investment, up to the U.S. holder’s adjusted tax basis
in the common stock. Any remaining excess will be treated as a
capital gain. Subject to certain limitations
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and restrictions, dividends received by corporate
U.S. holders will be eligible for the dividends received
deduction. For taxable years beginning on or before
December 31, 2010, dividends received by certain
noncorporate U.S. holders on common stock may be subject to
U.S. federal income tax at lower rates than other types of
ordinary income if certain conditions are met. U.S. holders
should consult their own tax advisers regarding the application
of these lower rates in their particular circumstances.
Sale or Other
Disposition of Common Stock
Gain or loss realized by a U.S. holder on the sale or other
disposition of our common stock will be capital gain or loss for
U.S. federal income tax purposes, and will be long-term
capital gain or loss if the U.S. holder’s holding
period for the common stock is greater than one year. The amount
of the U.S. holder’s gain or loss will be equal to the
difference between the U.S. holder’s amount realized
on the disposition and the adjusted tax basis in the common
stock disposed of. Long-term capital gains recognized by
non-corporate U.S. holders are taxed at reduced rates under
current law. The deductibility of capital losses may be subject
to limitations.
Tax Consequences
to Non-U.S.
Holders
As used herein, the term
“non-U.S. holder”
means a beneficial owner of our common stock that is, for
U.S. federal income tax purposes:
| • | an individual who is classified as a nonresident alien; | |
| • | a foreign corporation; or | |
| • | a foreign estate or trust. |
A
non-U.S. holder
does not include an individual who is present in the United
States for 183 days or more in the taxable year of
disposition and is not otherwise a resident of the United States
for U.S. federal income tax purposes. Such an individual is
urged to consult his or her own tax advisor regarding the
U.S. federal income tax consequences of the sale, exchange
or other disposition of common stock.
Dividends
Dividends paid by us to a
non-U.S. holder
of common stock generally will be subject to withholding tax at
a 30% rate or a reduced rate specified by an applicable income
tax treaty. In order to obtain a reduced rate of withholding, a
non-U.S. holder
will be required to provide an Internal Revenue Service
Form W-8BEN
certifying its entitlement to benefits under a treaty.
The withholding tax does not apply to dividends paid to a
non-U.S. holder
who provides a
Form W-8ECI,
certifying that the dividends are effectively connected with the
non-U.S. holder’s
conduct of a trade or business within the United States.
Instead, the effectively connected dividends will be subject to
regular U.S. income tax, generally in the same manner as if
the
non-U.S. holder
were a U.S. holder. A
non-U.S. corporation
receiving effectively connected dividends may also be subject to
an additional “branch profits tax” imposed at a rate
of 30% (or a lower treaty rate).
Gain on
Disposition of Common Stock
A
non-U.S. holder
generally will not be subject to U.S. federal income tax on
gain realized on a sale or other disposition of common stock
unless:
| • | the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (in which case, the non-U.S. holder will be taxed generally in the same manner as a U.S. holder), subject to an applicable treaty providing otherwise; or |
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| • | Greenhill is or has been a U.S. real property holding corporation at any time within the five-year period preceding the disposition or the non-U.S. holder’s holding period, whichever period is shorter, and its common stock has ceased to be regularly traded on an established securities market. |
Greenhill believes that it is not, and does not anticipate
becoming in the foreseeable future, a U.S. real property
holding corporation.
Federal Estate
Tax
Individual
Non-U.S. holders
and entities the property of which is potentially includible in
such an individual’s gross estate for U.S. federal
estate tax purposes (for example, a trust funded by such an
individual and with respect to which the individual has retained
certain interests or powers), should note that, absent an
applicable treaty benefit, the common stock will be treated as
U.S. situs property subject to U.S. federal estate tax.
Backup
Withholding and Information Reporting
Information returns and reports may be filed with the Internal
Revenue Service in connection with payments of dividends on the
common stock and the proceeds from a sale or other disposition
of the common stock. A U.S. holder may be subject to United
States backup withholding on these payments if it fails to
provide its taxpayer identification number to the paying agent
and comply with certification procedures or otherwise establish
an exemption from backup withholding. A
non-U.S. holder
may be subject to U.S. backup withholding on these payments
if it fails to comply with certification procedures to establish
that it is not a U.S. person. The amount of any backup
withholding from a payment will be allowed as a credit against
the holder’s U.S. federal income tax liability and may
entitle the holder to a refund, provided that the required
information is timely furnished to the Internal Revenue Service.
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UNDERWRITING
The Company, the selling stockholders and Goldman,
Sachs & Co. (the “underwriter”) have entered
into an underwriting agreement with respect to the shares being
offered. Subject to certain conditions, Goldman,
Sachs & Co. has agreed to purchase all of the
2,500,000 shares offered hereby.
The underwriter may receive from purchasers of the shares
brokerage commissions in amounts agreed with such purchasers.
Our common stock is traded on the New York Stock Exchange
under the symbol “GHL”.
The underwriter proposes to offer the shares of common stock
from time to time for sale in one or more transactions on the
New York Stock Exchange, in the
over-the-counter
market, through negotiated transactions or otherwise at market
prices prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices, subject to
receipt and acceptance by it and subject to its right to reject
any order in whole or in part. In connection with the sale of
the shares of common stock offered hereby, the underwriter may
be deemed to have received compensation in the form of
underwriting discounts. The underwriter may effect such
transactions by selling shares of common stock to or through
dealers, and such dealers (including, in certain instances,
Goldman, Sachs & Co.) may receive compensation in the
form of discounts, concessions or commissions from the
underwriter and / or purchasers of shares of common
stock for whom they may act as agents or to whom they may sell
as principal.
Each of Greenhill, its directors and officers and the selling
stockholders has agreed with the underwriter, subject to certain
exceptions, not to dispose of, pledge or hedge any of its common
stock or securities convertible into or exchangeable for shares
of common stock during the period from the date of this
prospectus supplement continuing through June 30, 2010,
except with the prior written consent of the underwriter. This
agreement does not apply to the shares of common stock
underlying any of the restricted stock units received by other
employees of Greenhill.
In connection with the offering, the underwriter may purchase
and sell shares of common stock in the open market. These
transactions may include short sales and purchases to cover
positions created by short sales. Short sales involve the sale
by the underwriter of a greater number of shares than it is
required to purchase in the offering. The underwriter will need
to close out any short sale by purchasing shares in the open
market. The underwriter is likely to create a short position if
it is concerned that there may be downward pressure on the price
of the common stock in the open market after pricing that could
adversely affect investors who purchase in the offering.
Purchases to cover a short position, as well as other purchases
by the underwriter for its own account, may have the effect of
preventing or retarding a decline in the market price of the
common stock, and may maintain or otherwise affect the market
price of the common stock. As a result, the price of the common
stock may be higher than the price that otherwise might exist in
the open market. If these activities are commenced, they may be
discontinued at any time. These transactions may be effected on
the New York Stock Exchange, in the
over-the-counter
market or otherwise.
The underwriter has represented and agreed that:
(a) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services
and Markets Act 2000 (the “FSMA”)) to persons who have
professional experience in matters relating to investments
falling within Article 19(5) of the FSMA (Financial
Promotion) Order 2005 or in circumstances in which
section 21 of the FSMA does not apply to the
Company; and
(b) it has complied, and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the shares in, from or otherwise involving the
United Kingdom.
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European Economic
Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a Relevant
Member State), the underwriter has represented and agreed that
with effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the
Relevant Implementation Date) it has not made and will not make
an offer of shares to the public in that Relevant Member State
prior to the publication of a prospectus in relation to the
shares which has been approved by the competent authority in
that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with
the Prospectus Directive, except that it may, with effect from
and including the Relevant Implementation Date, make an offer of
shares to the public in that Relevant Member State at any time:
(a) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
€43,000,000 and (3) an annual net turnover of more
than €50,000,000, as shown in its last annual or
consolidated accounts;
(c) to fewer than 100 natural or legal persons (other than
qualified investors as defined in the Prospectus Directive)
subject to obtaining the prior consent of the underwriter for
any such offer); or
(d) in any other circumstances which do not require the
publication by the company of a prospectus pursuant to
Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an
“offer of shares to the public” in relation to any
shares in any Relevant Member State means the communication in
any form and by any means of sufficient information on the terms
of the offer and the shares to be offered so as to enable an
investor to decide to purchase or subscribe the shares, as the
same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member
State, and the expression Prospectus Directive means Directive
2003/71/EC and includes any relevant implementing measure in
each Relevant Member State.
The shares may not be offered or sold by means of any document
other than to persons whose ordinary business is to buy or sell
shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public
within the meaning of the Companies Ordinance (Cap. 32) of
Hong Kong, and no advertisement, invitation or document relating
to the shares may be issued, whether in Hong Kong or elsewhere,
which is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if
permitted to do so under the securities laws of Hong Kong) other
than with respect to shares which are or are intended to be
disposed of only to persons outside Hong Kong or only to
“professional investors” within the meaning of the
Securities and Futures Ordinance (Cap. 571) of Hong Kong
and any rules made thereunder.
This prospectus supplement has not been registered as a
prospectus with the Monetary Authority of Singapore.
Accordingly, this prospectus supplement and any other document
or material in connection with the offer or sale, or invitation
for subscription or purchase, of the shares may not be
circulated or distributed, nor may the shares be offered or
sold, or be made the subject of an invitation for subscription
or purchase, whether directly or indirectly, to persons in
Singapore other than (i) to an institutional investor under
Section 274 of the Securities and Futures Act,
Chapter 289 of Singapore (the “SFA”),
(ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions,
specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
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Where the shares are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or (b) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries’ rights and interest in
that trust shall not be transferable for six months after
that corporation or that trust has acquired the shares under
Section 275 except: (1) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(2) where no consideration is given for the transfer; or
(3) by operation of law.
The securities have not been and will not be registered under
the Financial Instruments and Exchange Law of Japan (the
“Financial Instruments and Exchange Law”) and each
underwriter has agreed that it will not offer or sell any
securities, directly or indirectly, in Japan or to, or for the
benefit of, any resident of Japan (which term as used herein
means any person resident in Japan, including any corporation or
other entity organized under the laws of Japan), or to others
for re-offering or resale, directly or indirectly, in Japan or
to a resident of Japan, except pursuant to an exemption from the
registration requirements of, and otherwise in compliance with,
the Financial Instruments and Exchange Law and any other
applicable laws, regulations and ministerial guidelines of Japan.
We estimate that the total expenses of the offering, all of
which will be borne by the selling stockholders, and excluding
deemed underwriting discounts and commissions, will be
approximately $300,000.
Each of Greenhill and each of the selling stockholders has
agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933.
The underwriter and its affiliates are full service financial
institutions engaged in various activities, which may include
securities trading, commercial and investment banking, financial
advisory, investment management, principal investment, hedging,
financing and brokerage activities. The underwriter and certain
of its affiliates have, from time to time, performed, and may in
the future perform, various financial advisory and investment
banking services for Greenhill, for which they received or will
receive customary fees and expenses.
In the ordinary course of their various business activities, the
underwriter and certain of its affiliates may make or hold a
broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial
instruments (including bank loans) for their own account and for
the accounts of their customers and may at any time hold long
and short positions in such securities and instruments. Such
investment and securities activities may involve securities and
instruments of Greenhill.
VALIDITY OF
COMMON STOCK
The validity of the shares of common stock offered hereby has
been passed upon for Greenhill & Co., Inc. by Davis
Polk & Wardwell LLP, New York, New York. The validity
of the shares of common stock offered hereby will be passed upon
for Goldman, Sachs & Co. by Sullivan &
Cromwell LLP, New York, New York. Sullivan & Cromwell
LLP has performed legal services for us in the past.
EXPERTS
The consolidated financial statements of Greenhill &
Co., Inc., incorporated by reference in Greenhill &
Co., Inc.’s Annual Report
(Form 10-K)
for the year ended December 31, 2008, and the effectiveness
of Greenhill & Co., Inc.’s internal control over
financial reporting as of December 31, 2008, have been
audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon
incorporated by reference therein, and incorporated herein by
reference. Such consolidated financial statements have been
incorporated herein by reference in reliance upon such reports
given on the authority of such firm as experts in accounting and
auditing.
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PROSPECTUS
2,500,000 Shares
Greenhill & Co.,
Inc.
COMMON STOCK
Certain selling stockholders may offer and sell shares of our
common stock from time to time in amounts, at prices and on
terms that will be determined at the time of any such offering.
Each time any securities are offered pursuant to this
prospectus, we will provide a prospectus supplement and attach
it to this prospectus. The prospectus supplement will contain
more specific information about the offering, including the
names of any selling stockholders.
You should carefully read this prospectus and any supplement,
together with the documents we incorporate by reference, before
you invest in our common stock.
Our common stock is listed on the New York Stock Exchange under
the symbol “GHL”.
Investing in our common stock involves certain risks. See
“Risk Factors” beginning on page 6 of our annual
report on
Form 10-K
for the year ended December 31, 2008, which is incorporated
by reference herein.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities, or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is November 18, 2009
You should rely only on the information contained in or
incorporated by reference in this prospectus. We have not
authorized anyone to provide you with different information. We
are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the
information contained in or incorporated by reference in this
prospectus is accurate as of any date other than the date on the
front of this prospectus. The terms “Greenhill,”
“the firm,” “we,” “us,” and
“our” refer to Greenhill & Co., Inc. and,
unless the context otherwise requires, its consolidated
subsidiaries.
TABLE OF
CONTENTS
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Page
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Greenhill
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1 | |||
|
Where You Can Find More Information
|
4 | |||
|
Special Note on Forward-Looking Statements
|
5 | |||
|
Description of Capital Stock
|
6 | |||
|
Use of Proceeds
|
8 | |||
|
Validity of Securities
|
8 | |||
|
Selling Security Holders
|
8 | |||
|
Plan of Distribution
|
8 | |||
|
Experts
|
8 | |||
About this
Prospectus
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission
(“SEC”) utilizing a “shelf” registration
process. Under this shelf process, we and certain of our
stockholders may sell the common stock described in this
prospectus in one or more offerings. This prospectus provides
you with a general description of the common stock. Each time we
or certain of our stockholders sell common stock, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus
supplement may also add, update or change information contained
in this prospectus. You should read both this prospectus and any
prospectus supplement together with the additional information
described under the heading “Where You Can Find More
Information.”
Table of Contents
GREENHILL
Overview
Greenhill is an independent investment banking firm that
(i) provides financial advice on significant mergers,
acquisitions, restructurings and similar corporate finance
matters as well as fund placement services for private equity
and other financial sponsors and (ii) manages merchant
banking funds and similar vehicles and commits capital to those
funds and vehicles. We act for clients located throughout the
world from offices in New York, London, Frankfurt, Toronto,
Tokyo, Chicago, Dallas, Houston, Los Angeles and
San Francisco.
We were established in 1996 by Robert F. Greenhill, the former
President of Morgan Stanley and former Chairman and Chief
Executive of Smith Barney. Since its founding, Greenhill has
grown steadily, recruiting a number of managing directors from
major investment banks (as well as senior professionals from
other institutions), with a range of geographic, industry or
transaction specialties and different sets of corporate
management and other relationships. As part of this expansion,
we opened a London office in 1998, raised our first merchant
banking fund in 2000, opened a Frankfurt office later in 2000
and began offering financial restructuring advice in 2001. On
May 11, 2004, we converted from a limited liability company
to a corporation and completed an initial public offering of our
common stock. We opened our Dallas office and completed the
closing of our second merchant banking fund in 2005. We opened
our Toronto office and completed the final closing of our first
venture capital fund in 2006. In 2007, we completed the final
closing of our first European merchant banking fund. We
completed the initial public offering of our special purpose
acquisition company, GHL Acquisition Corp. (“GHLAC”),
in February 2008, opened our San Francisco office in April
2008, launched our Fund Placement Advisory Group in May
2008, opened our Tokyo office in October 2008 and opened our
Chicago office in December 2008. In the first nine months of
2009, we announced the formation of our Financing
Advisory & Restructuring Group in New York and London,
opened our Los Angeles and Houston offices and announced the
recruitment of 14 managing directors who bring us additional
sector expertise in financial services, infrastructure,
insurance, energy, consumer and retail, and gaming and lodging.
In October 2009, we announced the separation of our merchant
banking business. As of September 30, 2009, we employed 61
managing directors and senior advisors globally. We expect to
seek to continue to add industry-focused senior employees and to
expand geographically.
Principal Sources
of Revenue
Our principal sources of revenue are financial advisory services
and merchant banking.
Financial
Advisory Revenue
Our financial advisory business consists of mergers and
acquisitions, financing advisory and restructuring, and fund
placement advisory. For all of our financial advisory services,
we draw on the extensive experience, corporate relationships and
industry expertise of our managing directors and senior advisors.
On mergers and acquisitions engagements, we provide a broad
range of advice to global clients in relation to domestic and
cross-border mergers, acquisitions, and similar corporate
finance matters and are generally involved at each stage of
these transactions, from initial structuring to final execution.
Our focus is on providing high-quality advice to senior
executive management and boards of directors of prominent large
and mid-cap companies in transactions that typically are of the
highest strategic and financial importance to those companies.
We advise clients on strategic matters, including acquisitions,
divestitures, defensive tactics, special committee assignments
and other important corporate events. We provide advice on
valuation, tactics, industry dynamics, structuring alternatives,
timing and pricing of transactions, and financing alternatives.
Where requested to do so, we may provide an opinion regarding
the fairness of a transaction.
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Table of Contents
In our financing advisory and restructuring practice, we advise
debtors, creditors and companies experiencing financial distress
as well as potential acquirors of distressed companies and
assets. We provide advice on valuation, restructuring
alternatives, capital structures, and sales or
recapitalizations. We also assist those clients who seek
court-assisted reorganizations by developing and seeking
approval for plans of reorganization as well as the
implementation of such plans.
In our fund placement advisory practice we assist private equity
funds and other financial sponsors in raising capital from a
global set of institutional and other investors.
Financial advisory revenues accounted for 66%, 98% and 92% of
our revenues in the nine months ended September 30, 2009
and in fiscal years 2008 and 2007, respectively.
Non-U.S. clients
are a significant part of our business, generating 26%, 53% and
64% of our financial advisory revenues for the nine months ended
September 30, 2009 and in fiscal years 2008 and 2007,
respectively. We generate revenues from our financial advisory
services by charging our clients fees consisting principally of
fees paid upon the commencement of an engagement, fees paid upon
the announcement of a transaction, fees paid upon the successful
conclusion of a transaction or closing of a fund and, in
connection principally with restructuring assignments, monthly
retainer fees.
Merchant Banking
and Other
Our merchant banking activities currently consist primarily of
management of and investment in Greenhill’s merchant
banking funds, Greenhill Capital Partners I (or “GCP
I”), Greenhill Capital Partners II (or “GCP
II”, and collectively with GCP I, “Greenhill
Capital Partners” or “GCP”), Greenhill SAV
Partners (or “GSAVP”) and Greenhill Capital Partners
Europe (or “GCP Europe”), which are families of
merchant banking funds that invest in portfolio companies.
Merchant banking funds are private investment funds raised from
contributions by qualified institutional investors and
financially sophisticated individuals. The funds generally make
investments in non-public companies, typically with a view
toward divesting within 3 to 5 years. We intend to separate
our merchant banking business over time and in that connection
have recently agreed to sell the right to launch successor funds
to our merchant banking funds and certain other rights to
GCP’s management. See “— Separation from
Merchant Banking Activities”.
GCP typically makes controlling or influential minority
investments of $10 million to $75 million in companies
with valuations that are between $50 million and
$500 million at the time of investment. GCP has invested a
substantial portion of its capital in the energy, financial
services and telecommunications industries. GSAVP typically
makes smaller investments in early-growth-stage companies that
offer technology-enabled or business information services. Such
investments typically involve higher levels of risk and are more
speculative than our GCP investments. GCP Europe typically makes
controlling or influential minority investments of
£10 million to £30 million in companies with
valuations that are between £50 million and
£250 million at the time of investment.
Merchant banking and other revenue accounted for 34%, 2% and 8%
of our revenues in the nine months ended September 30, 2009
and in fiscal years 2008 and 2007, respectively. We expect these
numbers will decline over the coming years as we transition out
of the business. We generate merchant banking revenue from
(i) management fees paid by the funds we manage,
(ii) gains (or losses) on our investments in the merchant
banking funds and other principal investment activities,
including GHLAC, and (iii) merchant banking profit
overrides. We charge management fees in GCP II, GSAVP and GCP
Europe to all investors except the firm. In GCP I, we
charge management fees to all outside investors who are not
employed or affiliated with us. We may also generate gains (or
losses) from our capital investment in our merchant banking
funds depending upon the performance of the funds. Our
investments in our merchant banking funds generate realized and
unrealized investment gains (or losses) based on our allocable
share of earnings generated by the funds. As the general partner
of our merchant banking funds we make investment decisions for
the funds and are entitled to receive an override on the profits
of the funds after certain performance hurdles are met.
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Table of Contents
In 2007, we formed GHL Acquisition
Corp. (“GHLAC”), a special purpose
acquisition company, which completed an initial public offering
in early 2008. On September 29, 2009, the firm announced
that GHLAC completed its acquisition of Iridium Holdings LLC.
The combined company has been renamed Iridium Communications
Inc. (NASDAQ: IRDM, IRDMW, IRDMU, IRDMZ) (“Iridium”).
Following the planned conversion of the firm’s convertible
note in Iridium in the fourth quarter 2009, the firm will own
8,924,016 shares of Iridium common stock and warrants to
purchase 4,000,000 additional shares of common stock of Iridium
at $11.50 per share, each of which is restricted from sale for
one year from the acquisition date (or six months in the case of
a registered offering). Upon completion of the acquisition of
Iridium by GHLAC, the firm’s fully diluted ownership in
Iridium is approximately 12%.
Separation from
Merchant Banking Activities
On October 28, 2009, we entered into a Memorandum of
Agreement with Robert H. Niehaus (the “Memorandum of
Agreement”) and agreed to sell to an entity newly formed by
Mr. Niehaus (the “NewCo”) the right to raise
subsequent merchant banking funds, the right to use the track
record for the GCP funds, and portions of the partnership
interests entitled to carried interest allocations for a
purchase price of $25.0 million, payable principally in
Greenhill common stock. We also agreed to grant NewCo an
exclusive license to use the name “Greenhill Capital
Partners” in connection with certain successor funds to the
GCP funds. Mr. Niehaus is an executive officer of the firm
and the chairman of Greenhill Capital Partners. Existing GCP
funds will continue to be managed by us through Mr. Niehaus
and other current personnel until such persons are transitioned
at a later date to the purchasing entity. As a result of the
transaction, we will transition out of merchant banking
activities over time. We will retain our portfolio of principal
investments. This transaction is expected to close in the fourth
quarter of 2009.
We will retain the right to collect all management, monitoring,
transaction, investment and other fees payable in respect of the
existing GCP funds, but it is expected that those fees will be
used in their entirety to pay the costs (including compensation)
of the management of the GCP funds. Newco will be entitled to
collect and retain all management, monitoring, transaction,
investment and other fees payable in respect of the Greenhill
Capital Partners III, L.P. and Greenhill SAVP II, L.P.
(collectively, the “New Funds”).
We will be entitled to receive carried interest payable in
connection with existing or future investments made in 2009 by
the existing GCP funds, and such carried interest will be
allocated as follows: Carry allocated to the firm for the
existing GCP funds in respect of all years prior to and
including 2009 will remain in effect and subject to existing
terms. We will also be entitled to receive 1 out of 20 points of
carried interest in respect of all investments made by the
existing GCP funds on or after January 1, 2010 and all
investments made by the New Funds and an additional 1 point of
carried interest in each such investment in which certain of our
employees in the reasonable judgment of Mr. Niehaus plays a
material role in originating the investment or, if requested by
Mr. Niehaus, in the oversight of the investment.
Until the formal separation of GCP from Greenhill,
Mr. Niehaus and all other employees engaged in the
management of the existing GCP funds (the “GCP
Employees”) will remain employees of the firm and will
retain their existing rights and responsibilities.
Our principal executive offices are located at 300 Park Avenue,
23rd
Floor, New York, New York 10022, and our telephone number is
(212) 389-1500.
We maintain a website at www.greenhill.com where general
information about us is available. We are not incorporating the
contents of the website into this prospectus.
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WHERE YOU CAN
FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document that we file at the Public Reference Room of the SEC at
100 F Street, N.E., Washington, D.C. 20549. You
may obtain information on the operation of the Public Reference
Room by calling the SEC at
1-800-SEC-0330.
In addition, the SEC maintains an Internet site at
http://www.sec.gov,
from which interested persons can electronically access our SEC
filings, including the registration statement and the exhibits
and schedules thereto.
The SEC allows us to “incorporate by reference” the
information we file with them, which means that we can disclose
important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed
below and all documents we file pursuant to Section 13(a),
13(c), 14 or 15 (d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), on or after the date
of this prospectus and prior to the termination of the offering
under this prospectus and any accompanying prospectus supplement
(other than in each case unless otherwise indicated, documents
or information deemed to have been furnished and not filed in
accordance with SEC rules):
(a) Annual Report on
Form 10-K
for the year ended December 31, 2008;
(b) Quarterly Reports on
Form 10-Q
for the periods ended March 31, 2009, June 30, 2009
and September 30, 2009;
(c) Current Reports on
Form 8-K
filed on January 30, 2009, June 22, 2009,
July 23, 2009, July 30, 2009 and October 29,
2009; and
(d) Registration Statement on
Form 8-A
dated April 20, 2004.
You may request a copy of these filings at no cost, by writing
or telephoning:
Investor
Relations
Greenhill & Co., Inc.
300 Park Avenue
23rd Floor
New York, New York 10022
Telephone: (212 ) 389-1800
E-mail Address: Investorrelations@greenhill.com
Greenhill & Co., Inc.
300 Park Avenue
23rd Floor
New York, New York 10022
Telephone: (212 ) 389-1800
E-mail Address: Investorrelations@greenhill.com
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SPECIAL
NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
In some cases, you can identify these statements by
forward-looking words such as “may”,
“might”, “will”, “should”,
“expect”, “plan”, “anticipate”,
“believe”, “estimate”, “predict”,
“potential” or “continue”, the negative of
these terms and other comparable terminology. These
forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections
of our future financial performance, based on our growth
strategies and anticipated trends in our business. These
statements are only predictions based on our current
expectations and projections about future events. There are
important factors that could cause our actual results, level of
activity, performance or achievements to differ materially from
the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements. In
particular, you should consider the numerous risks outlined
under “Risk Factors” in our Annual Report on
Form 10-K
for the year ended December 31, 2008 (the
“10-K”),
which is incorporated by reference into this prospectus.
These risks are not exhaustive. Other sections of this
prospectus, any prospectus supplement and the documents
incorporated by reference may include additional factors which
could adversely impact our business and financial performance.
Moreover, we operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is
not possible for our management to predict all risk factors, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility
for the accuracy or completeness of any of these forward-looking
statements. You should not rely upon forward-looking statements
as predictions of future events. We are under no duty to update
any of these forward-looking statements after the date of this
filing to conform our prior statements to actual results or
revised expectations.
Forward-looking statements include, but are not limited to, the
following:
| • | the statements about our policy that our total compensation and benefits, including that payable to our managing directors and senior advisors, will not exceed 50% of total revenues each year (although we retain the ability to change this policy in the future) in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Compensation and Benefits”; | |
| • | the statement about our expectation that revenues from our financial advisory business will continue to account for the majority of our revenues in the near to medium-term in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview”; | |
| • | the statements about our expansion plans and the completion of the acquisition of Iridium in this prospectus under “Greenhill — Overview” and “Greenhill — Merchant Banking and Other”; | |
| • | the statement about new managing directors adding incrementally to our revenue and income growth potential in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview”; | |
| • | the statement about the bankruptcy or merger of our larger competitors will create opportunities for us to attract new clients and provide us with excellent recruiting opportunities to further expand our industry expertise and geographic reach in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment”; | |
| • | the statement that weak economic and financial conditions should provide attractive opportunities to invest unspent merchant banking capital in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment”; |
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| • | the statements about our expected annual fees from our merchant banking funds in 2009 and thereafter in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Merchant Banking and Other Revenues”; | |
| • | the statement that GHLAC’s consummation of its transaction with Iridium could provide a significant source of additional merchant banking revenue after completion in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Merchant Banking and Other Revenues”; | |
| • | the statement about our expectation that non-compensation costs, particularly occupancy, travel and information services costs, will increase as we grow our business and make strategic investments in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-Compensation Expense”; | |
| • | the discussion of our ability to meet liquidity needs in the 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources”; and | |
| • | the statement about the potential upturn in transaction activity and opportunity for us to expand in the 10-Q for the period ended September 30, 2009 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment”. |
DESCRIPTION OF
CAPITAL STOCK
General
Matters
The following description of our common stock and preferred
stock and the relevant provisions of our amended and restated
certificate of incorporation and amended and restated bylaws are
summaries thereof and are qualified by reference to our amended
and restated certificate of incorporation and amended and
restated bylaws, copies of which have been filed with the
Securities and Exchange Commission as exhibits to the
10-K and our
current Report on
Form 8-K
filed on January 30, 2009, respectively, which exhibits are
incorporated by reference into this prospectus.
Our authorized capital stock currently consists of
100,000,000 shares of common stock, $0.01 par value,
and 10,000,000 shares of preferred stock, $0.01 par
value.
Common
Stock
As of November 10, 2009, there were 28,244,854 shares
of common stock outstanding.
The holders of common stock are entitled to one vote per share
on all matters to be voted upon by the stockholders and do not
have cumulative voting rights. Subject to preferences that may
be applicable to any outstanding preferred stock, the holders of
common stock are entitled to receive ratably such dividends, if
any, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. See
“Dividend Policy”. In the event of liquidation,
dissolution or winding up of Greenhill, the holders of common
stock are entitled to share ratably in all assets remaining
after payment of liabilities, subject to prior distribution
rights of preferred stock, if any, then outstanding. The common
stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding
shares of common stock are fully paid and non-assessable, and
the shares of common stock to be issued upon completion of this
offering will be fully paid and non-assessable. As of
October 31, 2009, there were 11 holders of record of our
common stock.
Preferred
Stock
The Board of Directors has the authority to issue preferred
stock in one or more classes or series and to fix the
designations, powers, preferences and rights, and the
qualifications, limitations or restrictions thereof including
dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any class or
series, without further vote or action by the shareholders. The
issuance of preferred stock
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may have the effect of delaying, deferring or preventing a
change in control of Greenhill without further action by the
shareholders and may adversely affect the voting and other
rights of the holders of common stock. At present, Greenhill has
no plans to issue any of the preferred stock.
Voting
The affirmative vote of a majority of the shares of our capital
stock present, in person or by written proxy, at a meeting of
stockholders and entitled to vote on the subject matter will be
the act of the stockholders.
Our amended and restated certificate of incorporation may be
amended in any manner provided by the Delaware General
Corporation Law. The Board of Directors has the power to adopt,
amend or repeal our amended and restated bylaws.
Action by Written
Consent
Any action required or permitted to be taken at any annual or
special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if the consent to such
action in writing is signed by the holders of outstanding stock
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
Anti-Takeover
Effects of Delaware Law
Greenhill is subject to the “business combination”
provisions of Section 203 of the Delaware General
Corporation Law. In general, such provisions prohibit a publicly
held Delaware corporation from engaging in various
“business combination” transactions with any
interested stockholder for a period of three years after the
date of the transaction in which the person became an interested
stockholder, unless:
| • | the transaction is approved by the Board of Directors prior to the date the interested stockholder obtained such status; | |
| • | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or | |
| • | on or subsequent to such date, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 662/3% of the outstanding voting stock which is not owned by the interested stockholder. |
A “business combination” is defined to include
mergers, asset sales and other transactions resulting in
financial benefit to a stockholder. In general, an
“interested stockholder” is a person who, together
with affiliates and associates, owns (or within three years, did
own) 15% or more of a corporation’s voting stock. The
statute could prohibit or delay mergers or other takeover or
change in control attempts with respect to Greenhill and,
accordingly, may discourage attempts to acquire Greenhill even
though such a transaction may offer Greenhill’s
stockholders the opportunity to sell their stock at a price
above the prevailing market price.
Limitation of
Liability and Indemnification Matters
Our amended and restated certificate of incorporation provides
that a director of Greenhill will not be liable to Greenhill or
its shareholders for monetary damages for breach of fiduciary
duty as a director, except in certain cases where liability is
mandated by the Delaware General Corporation Law. Our amended
and restated certificate of incorporation also provides for
indemnification, to the fullest extent permitted by law, by
Greenhill of any person made or threatened to be made a party
to, or who is involved in, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such
person is or was a director or officer of Greenhill, or at the
request of Greenhill, serves or served as a director or officer
of any other enterprise,
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against all expenses, liabilities, losses and claims actually
incurred or suffered by such person in connection with the
action, suit or proceeding. Our amended and restated certificate
of incorporation also provides that, to the extent authorized
from time to time by our Board of Directors, Greenhill may
provide indemnification to any one or more employees and other
agents of Greenhill to the extent and effect determined by the
Board of Directors to be appropriate and authorized by the
Delaware General Corporation Law. Our amended and restated
certificate of incorporation also permits us to purchase and
maintain insurance for the foregoing and we expect to maintain
such insurance.
Listing
Our common stock is listed on the New York Stock Exchange under
the symbol “GHL”.
Transfer Agent
and Registrar
The transfer agent and registrar for our common stock is
American Stock Transfer & Trust Company.
USE OF
PROCEEDS
Unless otherwise specified in the applicable prospectus
supplement, the selling stockholders will receive all of the net
proceeds from the sale of the shares of common stock offered by
this prospectus. We will not receive any proceeds from the
offering contemplated by this prospectus.
VALIDITY OF
SECURITIES
The validity of the common stock in respect of which this
prospectus is being delivered will be passed on for us by Davis
Polk & Wardwell LLP.
SELLING
STOCKHOLDERS
Selling stockholders will use this prospectus in connection with
resales of shares. The applicable prospectus supplement or
post-effective amendment will identify the selling stockholders,
the terms of the securities and the transaction in which the
selling stockholders acquired the shares. Selling stockholders
may be deemed to be underwriters in connection with the shares
they resell and any profits on the sales may be deemed to be
underwriting discounts and commission under the Securities Act
of 1933, as amended. Unless otherwise specified in the
applicable prospectus supplement, we will not receive any
proceeds from the sale of shares by selling stockholders.
PLAN OF
DISTRIBUTION
Selling stockholders may sell the offered shares through agents,
underwriters or dealers, or directly to one or more purchasers,
or through a combination of these methods of sale. We will
identify the specific plan of distribution, including any
agents, underwriters, dealers or direct purchasers, and any
compensation paid in connection therewith, in the applicable
prospectus supplement.
Unless otherwise specified in the applicable prospectus
supplement, the offered shares will be offered for sale from
time to time in one or more transactions on the New York Stock
Exchange, in the over-the-counter market, through negotiated
transactions or otherwise at market prices prevailing at the
time of sale, at prices related to prevailing market prices or
at negotiated prices.
EXPERTS
The consolidated financial statements of Greenhill &
Co., Inc., incorporated by reference in Greenhill &
Co., Inc.’s Annual Report
(Form 10-K)
for the year ended December 31, 2008, and the effectiveness
of Greenhill & Co., Inc.’s internal control over
financial reporting as of December 31, 2008, have been
audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon
incorporated by reference therein, and incorporated herein by
reference. Such consolidated financial statements have been
incorporated herein by reference in reliance upon such reports
given on the authority of such firm as experts in accounting and
auditing.
8
You should rely only on the information contained in or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not, and the underwriters have
not, authorized anyone to provide you with different or
inconsistent information. We are not, and the underwriters are
not, making an offer of these securities in any state where the
offer is not permitted. You should not assume that the
information contained in this prospectus supplement, the
accompanying prospectus and the documents incorporated by
reference is accurate as of any date other than their respective
dates. Our business, financial condition, results of operations
and prospects may have changed since these dates.
TABLE OF
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2,500,000 Shares
Greenhill & Co.,
Inc.
Common Stock
Goldman, Sachs &
Co.