Skip to main content

Canadian Imperial Bank of Commerce is adding to its expanded U.S. footprint by acquiring Cleary Gull, a boutique investment banking company based in Milwaukee.

The deal, announced Tuesday morning, bolsters CIBC’s capacity to serve the middle market – privately owned companies that are the bread and butter of its U.S. commercial banking business – particularly in the U.S. Midwest. Cleary Gull’s typical clients are businesses owned by families and entrepreneurs with earnings before interest, taxes, depreciation and amortization (EBITDA) of US$50-million or less.

Ever since CIBC paid US$5-billion in 2017 to acquire Chicago-based PrivateBancorp Inc., a mid-market commercial bank that also specializes in private wealth management, CIBC has been looking for smaller, add-on deals to expand its reach. The bank’s adjusted U.S. profits grew 24 per cent over the last year, fuelled by rapidly rising loans and deposits, and revenues from the U.S. capital-markets business rose 7 per cent. Even so, CIBC’s shares trade at a steep discount to peers, as wary investors await proof that the bank can sustain its expansion in the fiercely competitive U.S. market.

Story continues below advertisement

Terms of the deal to acquire Cleary Gull were not disclosed, but it is not financially material to CIBC and is expected to close in the fourth quarter of this year, subject to regulatory approvals.

“This, for us, is part of our building process," said Roman Dubczak, CIBC’s head of global investment banking, in an interview. "It fits well, should grow very well, and certainly fills some gaps for us in terms of our coverage capabilities in the U.S.”

Founded in 1987, Cleary Gull has 23 bankers who will join the capital markets arm of CIBC Bank USA, which was built on the foundation of the former PrivateBank, as PrivateBancorp was commonly known. For a brief period starting in 2001, Cleary Gull was owned by Royal Bank of Canada through its Dain Rauscher Inc. subsidiary, but it was soon spun off.

Cleary Gull specializes in mergers and acquisitions, private-capital placement and debt-advisory services, especially in industries such as manufacturing, business services, consumer goods and technology. Their roster of clients is heavily weighted toward the U.S. Midwest but spans much of the country.

“There’s a temptation on behalf of a lot of the U.S. investment banks to go upmarket,” serving “larger and larger” companies, Mr. Dubczak said. “Our intent is to really stick to the private economy and to stay true to the client base that we’ve established through the PrivateBank acquisition.”

Earlier this year, CIBC also made changes to its U.S. leadership, naming Michael Capatides as the new chief executive of CIBC Bank USA. Mr. Capatides succeeded Larry Richman, the long-time head of the former PrivateBancorp, who steered the bank through its merger with CIBC and has since moved to a new role as chair of the U.S. business.

There could be more U.S. deal-making to come for CIBC, either in capital markets or to bulk up its commercial-banking and wealth-management operations, as analysts predict further consolidation among mid-sized U.S. banks. At an investor day late in 2017, CIBC predicted that 40 per cent of anticipated growth in capital markets earnings would come from the U.S.

Story continues below advertisement

“As we evolve with our clients, if we need to fulfill capabilities, we will. It feels pretty good now," Mr. Dubczak said. “We’re very comfortable that there’s a lot of territory for us.”

Stay up to date on all our Streetwise stories. We have a Streetwise newsletter, covering mergers and acquisitions, plus financial services news. It is sent Tuesday to Saturday morning. Sign up today.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies