B. Riley Financial, Inc. is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners.
The company operates through several consolidated subsidiaries (collectively, 'B. Riley') that provide investment banking, brokerage, wealth management, asset management, direct lending, business advisory, valuation, and asset disposition services to a broad client base spanning public and private companies, fin...
B. Riley Financial, Inc. is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners.
The company operates through several consolidated subsidiaries (collectively, 'B. Riley') that provide investment banking, brokerage, wealth management, asset management, direct lending, business advisory, valuation, and asset disposition services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals.
The company opportunistically invests in and acquires companies or assets with attractive risk-adjusted return profiles to benefit the company's shareholders. The company owns and operates several uncorrelated consumer businesses and invest in brands on a principal basis. The company's principal investments often leverage the financial, restructuring, and operational expertise of the company's professionals who work collaboratively across disciplines.
The company refers to B. Riley as a 'platform' because of the unique composition of the company's business. The company's platform has grown considerably and become more diversified over the past several years. The company has increased its market share and expanded the depth and breadth of the company's businesses both organically and through opportunistic acquisitions. The company's increasingly diversified platform enables the company to invest opportunistically and to deliver strong long-term investment performance throughout a range of economic cycles.
The company's platform is consisted of more than 2,700 affiliated professionals, including employees and independent contractors. The company is headquartered in Los Angeles, California and maintains offices throughout the U.S., including in New York, Chicago, Metro District of Columbia, Atlanta, Boston, Dallas, Metro Detroit, Houston, Memphis, Miami, San Francisco, Boca Raton, and West Palm Beach, as well as additional offices located in Canada, Europe, Asia, and Australia.
On February 29, 2024, the company had retained Moelis & Company LLC as an independent financial advisor to assist in the company's review of strategic alternatives for its Appraisal and Valuation Services, and Retail, Wholesale & Industrial Solutions businesses (collectively formerly known as 'Great American Group'), which could include a potential sale or other transaction.
On August 21, 2023, the company acquired an equity interest in Freedom VCM.
Business Segments
The company reports its activities in six reportable business segments: Capital Markets, Wealth Management, Financial Consulting, Auction and Liquidation, Communications, and Consumer Products segment.
Capital Markets Segment
The company provides investment banking and institutional brokerage services to publicly traded and privately held companies, institutional investors, and financial sponsors; fund and asset management services to institutional and high-net-worth individual investors; and direct lending services to middle market companies.
In addition, the company trades equity securities as a principal for the company's account, including investments in funds managed by its subsidiaries. The company maintains an investment portfolio consisted of public and private equities and debt securities. The company also opportunistically provide loans to the company's clients and other borrowers. The company's investment approach is value-oriented and represents a core competency of the company's capital markets strategy. The company acts as an advisor to its clients, which at times involves complex transactions consistent with the company's value-oriented investment philosophy. The company often provides consulting, capital raising, or investment banking services for companies in which B. Riley may have significant influence through equity ownership, representation on the board of directors (or similar governing body), or both.
Investment Banking
The company provides a full suite of capital markets and financial advisory services for small- and mid-cap companies and issuers and middle market financial sponsors, as well as larger companies in industries where the company has particular expertise.
The company's equity capital markets team provides an array of financing and sector-specific corporate finance solutions focused on the execution of public and private equity offerings. The company sources, structures, prices and allocates underwritten public offerings and private placements spanning initial public offerings ('IPOs'), secondary and follow-on offerings, at-the-market offerings ('ATMs'), Rule 144A offerings (pre-public private placements), block trades, and corporate equity repurchase programs.
The company's debt capital markets capabilities include the structuring and sourcing of debt financing solutions in public and private capital markets including acting as an underwriter of preferred stock and unsecured notes offerings, convertible and mezzanine debt offerings, and leveraged loans. In addition, the company raises capital for private credit and private equity funds focused on the middle market.
The company's investment banking advisory professionals blend deep industry and transaction expertise to execute financial transactions for healthy companies pursuing growth, and for stakeholders of financially distressed companies, both in bankruptcy proceedings and out-of-court transactions. The company provides financial advisory and execution services in the support of mergers & acquisitions ('M&A'), restructuring, and recapitalization.
Equity Research
The company is widely recognized for its proprietary and thematic approach to equity research. The company's research primarily focuses on small- and mid-cap equities that are under-followed by Wall Street. The company maintains research coverage for a variety of companies and industry sectors, focused on in-depth analyses of earnings, cash flow, balance sheet strength, and industry outlook involving extensive discussions with key management, competitors, channel partners, and customers.
Institutional Sales and Trading
The company's institutional equity sales and trading team distributes its proprietary equity research products and communicates the company's investment recommendations to its client base of institutional investors, executes equity trades on behalf of clients, sells the securities of companies for which the company acts as an underwriter, and makes a market in over 1,500 securities. The company maintains active trading relationships with over 1,000 institutional money managers.
Securities Lending
The company engages in securities-based lending which involves the borrowing and lending of equity and fixed income securities.
Proprietary Trading
The company also engages in proprietary trading for strategic investment purposes and to facilitate the execution of client transactions by utilizing the firm's capital.
Fund Management and Asset Management
The company manages private funds and funds of funds. The company's managed funds invest in both public and private equities and debt securities, often leveraging the insight, expertise, and resources of the company's affiliates.
Direct Lending
Certain of the company's affiliates originate and underwrite senior secured loans, second lien secured loan facilities, and unsecured loans to asset-rich middle market public and private U.S. companies. The company periodically participates in loans and financing arrangements for entities in which the company has an equity ownership and representation on the board of directors (or similar governing body). B. Riley may also provide consulting services or investment banking services to raise capital for these companies.
Investing
Part of the company's overall strategy includes identifying attractive investment opportunities where the company may seek to control or influence the operations of the companies in which the company invests in order to deliver financial and operational improvements designed to maximize free cash flow and, therefore, returns to the company's shareholders. The company's team concentrates on opportunities presented by distressed companies or divisions that exhibit challenging market dynamics. Representative transactions include acquisitions of receivable portfolios, recapitalizations, direct equity investments, debt investments, active minority investments, and buyouts.
Venture Capital
The company invests in late-stage private growth companies with a path towards public markets. The company typically participates in rounds by allocating between $1.0-10.0 million as part of a larger round (Series B, C, or D), with an investment horizon over two to three years. The company is not a venture fund; investments are made off-balance sheet and syndicated across B. Riley's investment banking, institutional, and high-net-worth individual client base.
Wealth Management Segment
The company provides retail brokerage, investment management, and insurance, and tax preparation services to individuals and families, small businesses, non-profits, trusts, foundations, endowments, and qualified retirement plans through a boutique private wealth and investment management firm to meet the individual financial needs and goals of the company's customers.
The company's experienced financial advisors provide investment management, retirement planning, education planning, wealth transfer and trust coordination, and lending and liquidity solutions. The company's investment strategists provide strategies and real-time market views and commentary to help the company's clients make important and informed financial and investment decisions.
Financial Consulting Segment
The company provides a variety of specialized advisory services spanning bankruptcy, restructuring, turnaround management, forensic accounting, crisis and litigation support, appraisal and valuation, real estate, and operations management.
The company's financial consulting clients include companies, financial institutions, lenders, financial sponsors, boards of directors, shareholders, creditors, government agencies, municipalities, regulatory agencies, and legal and professional services firms.
Bankruptcy Restructuring and Turnaround Management
Professionals in the company's bankruptcy restructuring and turnaround management group provide restructuring advisory services spanning strategic and operational advisory, turnaround management, Chief Restructuring Officer and interim management, and fiduciary and receivership services. The company is often engaged to represent debtors, creditors, committees and lenders in out-of-court restructuring and formal bankruptcy court proceedings. The company also acts as court-appointed fiduciaries and trustees in chapter 11 and chapter 7 bankruptcy proceedings.
Forensic Accounting and Litigation Support
The company's services support highly complex, sensitive matters spanning antitrust, competition and class action lawsuits, commercial litigation and construction disputes, valuation disputes, fraud, and internal investigations. The company is often called on to assist government agencies such as the Securities and Exchange Commission ('SEC'), Department of Justice, and various state and municipalities to investigate allegations and provide expert analyses related to lost profits and financial damages, data analytics, and to provide expert witness testimony in court proceedings.
Valuation and Appraisal
The company is primarily engaged by major lending institutions, private equity firms, and other providers of capital for valuation services in the support of mergers and acquisitions, lending, and other transaction financing activities. The company's appraisal professionals offer deep specialization across industries and asset classes, including consumer retail, wholesale and industrial inventory, machinery and equipment, real estate, tax valuation, intellectual property ('IP'), fixed assets, business and securities, and intangible assets. The company conducts over 1,600 independent appraisals annually, many of which include recurring company assignments to support asset-based lending ('ABL') facilities. The company's appraisal division's broad client base represents a vast network of companies for which other B. Riley affiliates may also provide services.
Real Estate
The company provides services to owners, companies, financial institutions, investors, family offices and individuals to support real estate acquisitions and sales, bankruptcy auctions and liquidations, loan sales, transaction financing, restructurings, lease renegotiation, and refinancing. As distressed specialists, the core focus of the company's business is the restructuring of lease obligations on behalf of healthy and distressed corporate tenants, both in and out-of-court.
Auction and Liquidation Segment
The company provides retail liquidation services that utilize significant industry experience and a scalable network of independent contractors and advisors to help clients quickly and efficiently dispose of under-performing assets and generate cash from excess inventory by conducting or assisting in retail store closings, going out of business sales, bankruptcy sales, and fixture sales. Financial institutions and other capital providers rely on the company to maximize recovery rates in distressed asset sales and in retail bankruptcy situations. Additionally, the company works with healthy, mature retailers that utilize the company's proven inventory management and strategic disposition solutions to close unproductive stores and dispose of surplus inventory and fixtures as existing stores are updated.
The company often conducts large retail liquidations that entail significant capital requirements through collaborative arrangements with other liquidators and provide services to clients on a fee, guarantee or outright purchase basis. The company's scale and pool of resources allow the company to offer its services across North America as well as parts of Europe, Asia, and Australia.
The company provides equipment management and capital recovery solutions to lenders in various wholesale and industrial industries. The company's services include auctions, private treaty, liquidation, valuations, and a host of asset planning and recovery strategies to maximize return.
Communications Segment
The company's communications portfolio of companies consists of related businesses that the company has acquired for attractive risk-adjusted investment return characteristics. The company may pursue future acquisitions to expand this portfolio of businesses which includes: Lingo Management, LLC ('Lingo Management'), a global cloud/unified communications ('UC') and managed service provider that includes the operations of BullsEye Telecom ('BullsEye') that was merged into Lingo Management in July 2023, a single source communications and cloud technology provider (collectively 'Lingo'); Marconi Wireless Holdings, LLC ('Marconi Wireless'), a mobile virtual network operator ('MVNO') that provides mobile phone voice, text, and data services and devices; magicJack VoIP Services, LLC, ('magicJack'), a VoIP cloud-based technology and communications provider that offers related devices and subscription services; and United Online, Inc. ('UOL'), an Internet access provider that offers dial-up, mobile broadband and digital subscriber line ('DSL') services under the NetZero and Juno brands.
Consumer Products Segment
The Consumer Products segment is consisted of Targus, which is a multinational company that designs, manufactures, and sells consumer and enterprise productivity products with a large business-to-business (B2B) customer client base and global distribution in over 100 countries. The Targus product line includes laptop and tablet cases, backpacks, universal docking stations, and computer accessories. The company acquired Targus on October 18, 2022.
Customers
The company serves retail, corporate, capital providers and individual customers across the company's services lines. The company is primarily engaged for its financial services by corporate customers, including publicly held and privately owned companies, financial institutions, institutional investors, lenders and other capital providers, and legal and other professional services firms.
The company maintains client relationships with companies and service providers to the consumer goods, industrials, energy, financial services, healthcare, real estate, and technology industries. The company provides fund and asset management services and products to institutional, high-net-worth and individual investors.
The company's communications and consumer products businesses primarily provide services and related consumer products to individual customers.
Regulation
The company's broker-dealer subsidiaries are registered with the SEC and are members of Financial Industry Regulatory Authority ('FINRA'). FINRA is a self-regulatory body composed of members such as the company's broker-dealer subsidiaries that have agreed to abide by the rules and regulations of FINRA. The company's broker-dealer subsidiaries are licensed as broker-dealers in all 50 states in the U.S., requiring the company to comply with the laws, rules and regulations of each such state. The company is also registered with NASDAQ and must comply with its applicable rules.
The company's broker-dealer subsidiaries are also subject to the SEC's Uniform Net Capital Rule, Rule 15c3-1. The company is also subject to the USA PATRIOT Act of 2001 (the Patriot Act), which imposes obligations regarding the prevention and detection of money-laundering activities, including the establishment of customer due diligence and customer verification, and other compliance policies and procedures.
The company's asset management subsidiaries are SEC-registered investment advisers, and accordingly subject to regulation by the SEC.
magicJack provides broadband telephone services using VoIP technology as well as resells mobile services. In the United States, the Federal Communications Commission ('FCC' or the 'Commission') has asserted limited statutory jurisdiction and regulatory authority over the operations and offerings of providers of broadband telephone services, such as magicJack that offer non-interconnected VoIP services.
History
The company was founded in 1973. It was incorporated in Delaware in 2009. The company was formerly known as Great American Group, Inc. and changed its name to B. Riley Financial, Inc. in 2014.
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