Klein Co is Acquired by Credit Suisse for $175 Million

Klein and Co. were acquired by Credit Suisse Group on Thursday for USD 175 million as part of its plan to spin off its investment bank.

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Trade Algo reports that the Swiss bank is cutting thousands of jobs to restructure and win back customers after scandals and financial losses. During the fourth quarter, when concerns about its financial health reached a frenzy, it said its wealth management saw around USD 100 billion of customer outflows. Earlier this year, Credit Suisse began dismantling its investment bank and issuing new shares.

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A website for M. Klein Company describes the company as a global strategic adviser to some of the world's largest and most complex organizations.

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Michael Klein joined Credit Suisse's executive board and will lead the new investment banking spinoff -- CS First Boston -- after the bank acquired New York-based Klein and Co on Thursday. According to Credit Suisse Chief Executive Ulrich Korner, the convertible note and warrant purchase will create shareholder value.

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According to the Journal, Klein served as a supervisory board member of Credit Suisse until October, when the acquisition was announced. The investment bank underwent a strategic review under his leadership last summer. There were no conflicts of interest, the bank told the Journal.

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According to Trade Algo, Credit Suisse plans to separate the advisory and capital markets parts of its investment bank into CS First Boston. In addition to raising outside capital, the bank hopes to list the new entity in a separate IPO in the future.

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Credit Suisse reported a loss of USD 1.5 billion for the fourth quarter. A 74% decline in revenue was recorded at the firm's investment bank, while a 17 percent decline was recorded at its wealth management business.