SOURCE: Thomas Weisel Partners LLC

March 04, 2005 18:46 ET

Thomas Weisel Partners Reports Fourth Quarter and Full-Year 2004 Results

SAN FRANCISCO, CA -- (MARKET WIRE) -- March 4, 2005 -- Thomas Weisel Partners LLC, a merchant bank focused exclusively on the growth sectors of the economy, reported its fourth quarter and 2004 results. Revenues for the fourth quarter were $63 million, bringing full-year revenues to $270 million (up from $254 million in 2003).

"We are pleased to report an increase in annual revenues and the firm's continued rise in the competitive standings," said Thomas W. Weisel, Chairman and CEO of Thomas Weisel Partners (TWP). "TWP ranked No.1 in technology IPOs and No.3 in venture capital sponsored IPOs in the consumer, healthcare, internet, media & telecommunications and technology sectors in 2004.(1) In addition, our institutional brokerage business had its sixth consecutive year of growth and increased average daily trading volume by 23%. Finally, we continue to attract top talent to our organization and to hone our operations. We feel the firm is well positioned for the future."

Key highlights of 2004 results include the following:

--  Investment Banking:  TWP increased its investment banking activity
    48%, completing and announcing 96 financing and M&A transactions, totaling
    nearly $13 billion in transaction value.   The firm continued to
    distinguish itself as the underwriter of choice for growth companies in the
    consumer, healthcare, internet, media & telecommunications and technology
    sectors, and was the most active underwriter of technology IPOs for the
    year, in terms of the number of transactions completed1.  In addition, the
    group's M&A activity doubled, with 26 transactions completed or announced
    for more than $2 billion in transaction volume.  In November, the firm
    announced an investment banking alliance focused on Israel with Magnolia
    Capital Partners.  The group also expanded its client coverage by adding
    six new partners.
    
--  Institutional Brokerage:  The firm recorded its sixth consecutive year
    of growth in trading, with a 23% increase in average daily trading volume.
    During the year, TWP continued to build out its comprehensive research
    coverage of growth stocks, publishing 684 thematic research pieces and
    white papers.  The firm's 32 research analysts ended the year with 467
    stocks under coverage.
    
--  Asset Management: The firm's four private equity funds invested nearly
    $250 million in 20 new portfolio companies.  In addition, Thomas Weisel
    Global Growth Partners, the firm's fund of funds established two new funds.
    Thomas Weisel Distribution Management, the firm's private equity
    distribution management business, saw client in-kind distribution volume
    increase by 88% to $309 million.
    
--  Private Client Department:  The wealth management business had a very
    strong year, increasing assets in custody by 80% to $8.5 billion.  The
    group hired five senior professionals in 2004 and recently welcomed back
    Allen Chozen, the group's founding partner.
    
Investment Banking: TWP's 2004 Investment Banking activity increased 48%, with 96 transactions completed in 2004. By industry sector, the group completed 39 technology, 28 healthcare, 17 consumer and industrial and 12 internet, media & telecommunications transactions.

Key transaction highlights by product are outlined below.

   Mergers & Acquisitions: M&A activity doubled to 26 closed or announced
   transactions in 2004 from 13 closed transactions in 2003.  During the
   year, the firm advised clients from a variety of sectors including:
   Chalone Wine Group, Ltd. on its $225 million sale to Diageo North
   America; Medicis Pharmaceutical Corporation on its $190 million
   licensing of ORAPED to BioMarin Pharmaceutical, Inc.; aQuantive, Inc.
   on its $160 million purchase of SBI.Razorfish; and Tower Technology
   Pty, Ltd. on its $125 million sale to Vignette Corporation.

   Initial Public Offerings:  TWP was the most active underwriter of
   technology IPOs and the third most active underwriter of venture
   sponsored IPOs in the consumer, healthcare, internet, media &
   telecommunications and technology sectors, in terms of the number of
   completed transactions in 20041.  The firm completed 31 IPOs and acted
   as lead or co-lead manager on seven financings for clients including:
   Corcept Therapeutics Inc.; Inhibitex, Inc.; Motive, Inc.; Phase Forward
   Inc.; RightNow Technologies Inc.; Standard Parking Corporation; and
   Xenogen Corporation. The firm was also a manager on the IPO for
   Google Inc.

   Follow-On, Convertible and Overnight Transactions:  During the year, TWP
   managed 30 follow-on, convertible and overnight transactions.  The firm
   acted as the sole, lead or co-lead manager on eight financings for
   clients including:  Ace Cash Express, Inc.; aQuantive; Cache, Inc.;
   Collegiate Pacific; Coinstar, Inc.; Merix Corporation; TTM Technologies
   and Universal Technical Institute, Inc.

   Private Placements and PIPES:  TWP completed 9 private placement and
   PIPE (private investment in public entity) transactions for clients
   including:  Broadvision, Combimatrix, eDiets.com, Hybridon, Immersion
   Corp., ISTA Pharmaceuticals, Loudeye, Restore Medical and Sirna
   Therapeutics.
In November, the firm announced an investment banking alliance with Magnolia Capital Partners LTD located in Herzeliya, Israel and in California. Under the alliance, Magnolia Capital will market Thomas Weisel Partners investment banking services to corporations located in Israel. This alliance further enhances the firm's international coverage of growth companies and complements its existing coverage of Asia and Europe through its strategic alliance with Nomura Securities.

During the year, the firm also hired six new investment banking partners with a focus on enhancing its coverage of the technology and telecommunications services, adding coverage of industrial services and enhancing its capital markets capabilities. New partners included:

--  Blake Kim, formerly of Lehman Brothers - Technology
--  Bill McLeod, formerly of Banc of America Securities - Equity Capital
    Markets
--  Patrick O'Shaughnessy, formerly of Credit Suisse First Boston and
    Donaldson, Lufkin & Jenrette Securities - Industrial Services
--  Brad Raymond, formerly of Morgan Stanley - Technology
--  Mark Roberts, formerly of Bear Stearns - Technology
--  Kevin Swanson, formerly of Banc of America Securities -
    Telecommunications
    
Institutional Brokerage: The firm ended the year with significant growth in trading, recording a 23% increase in average daily volume. This increase was driven by the firm's growing recognition of its comprehensive coverage of growth stocks. During the year, the firm was ranked No.1 in small cap stock coverage by four of the nation's top institutional investors. In addition, the Research team published 684 thematic research reports and white papers, highlighting the growth drivers of the consumer, healthcare, industrial growth, internet, media & telecommunications and technology sectors and their impact on specific stocks. The Research team also continued to build out existing industry franchises and initiated coverage on three new industries: Autos and Automotive Aftermarket Retailing, Small and Mid-Cap Biotechnology and Semiconductor Capital Equipment. The firm's 32 research analysts ended the year covering 467 stocks.

Asset Management: The firm's Asset Management business includes entities focused on both private and publicly-traded investment activities.

Tailwind Capital Partners LLC, the firm's $1.3 billion merchant banking affiliate focused on buyouts and growth equity investments in the technology & business services, media & communications and healthcare sectors, invested $196 million in five new portfolio companies including: Aircast, Inc. (orthopedic bracing devices), Concord Music Group (jazz music), Hospital Partners of America (hospital management), Trover Solutions (business services), Flying Bear (new venture to acquire and run radio stations) and Tower Company (new venture to acquire communications towers). During the year, the fund had a number of liquidity events including the $130 mm sale of Racal Instruments to EADS North America and the IPOs of MarketAxess Holdings Inc. and Phase Forward Inc.

Thomas Weisel Venture Partners L.P. ("TWVP"), the firm's $255 million technology venture capital fund, invested nearly $25 million in five new portfolio companies in 2004 including: Application Security, Inc., Propagate Networks, Senforce, Siliquent Technologies and Vocera Communications. The new investments bring the TWVP's total portfolio count to 15 active companies. During 2004, TWVP also invested $14.7 million in follow-on funding for current portfolio companies.

Thomas Weisel Healthcare Venture Partners L.P. ("TWHVP"), the firm's $122 million healthcare venture fund invested approximately $25 million in five new portfolio companies in 2004 including: Aspreva Pharmaceuticals Corporation, Hansen Medical Inc., Kai Pharmaceuticals, Quatrx Pharmaceuticals Company and Spinal Motion, Inc. The new investments bring the TWHVP's total portfolio count to six companies. During the year, CoTherix Inc. completed an IPO and recently completed a follow-on offering in February 2005. In addition, Aspreva filed its S-1 registration in January 2005.

Thomas Weisel Global Growth Partners L.P. ("TWGGP"), the firm's private equity funds management group, had a final close on its $131 million Global Growth Partners II (S) fund. TWGGP also launched a venture capital fund of funds vehicle for two international investors. This program is focused on investing in established, top-tier venture funds, and brings total assets under management by TWGGP to $600 million.

Thomas Weisel Distribution Management, the firm's private equity distribution management business, processed over $309 million of in-kind distributions from private equity and venture capital funds, an 88% increase in volume over 2003. The significant rise in demand was driven by increased activity with LBO funds.

Private Client Department: The firm's wealth management business had a very strong year, increasing assets in custody by 80% to $8.5 billion. The increase in assets was driven by greater demand for the firm's Asset Management Consulting program and the expansion of client coverage. During the year, five senior professionals joined the team. In February 2005, the firm also welcomed back Allen Chozen, the Private Client Department's founding partner.

Thomas Weisel Partners is a merchant bank providing investment banking, institutional brokerage, private client services, private equity investing and asset management exclusively focused on the growth sectors of the economy. The firm's distinctive competence is combining deep domain expertise, superior transaction execution capability and senior level attention. Thomas Weisel Partners has approximately 550 employees and is headquartered in San Francisco with additional offices in New York, Boston and Palo Alto, California.

(1) Based on Commscan, Equidesk and SEC filings. Rankings based on completed technology IPOs for companies in the contract manufacturing, hardware, information technology, internet, semiconductor and software sectors and completed venture capital sponsored IPOs in the consumer, healthcare, internet, media & telecommunications and technology sectors.

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