Canaccord Financial, a Canada-based financial services firm, has signed a definitive agreement to acquire Genuity Capital Markets, a Canada-based partner-owned investment bank, for approximately CAD285.9m.
As per the agreement, Canaccord will acquire 100% of Genuity Capital Markets for consideration consisting of 26.5 million Canaccord common shares and cash of CAD30m. The combined capital markets operations in Canada, US and the UK will be renamed as Canaccord Genuity on closing.
Upon closing, Canaccord will appoint two nominees of the existing Genuity partnership (David Kassie and Philip Evershed) to its board of directors. Mr Kassie will serve as Canaccord’s group chairman while Peter Brown will serve as chairman and founder.
However, Paul Reynolds, Mark Maybank and Brad Kotush will continue as president and CEO, chief operating officer, and chief financial officer for Canaccord, respectively.
Jens Mayer from Canaccord and Ted Hirst from Genuity will serve as global co-heads of investment banking. Daniel Daviau from Genuity will be head of Canadian investment banking. Earl Rotman from Genuity will be appointed vice chairman, investment banking, and Barry Goldberg from Genuity will be global head of mergers, acquisitions and restructuring. Matthew Gaasenbeek from Canaccord will be global head of sales and trading. Mark Maybank will continue to serve as global director of research.
Mr Reynolds said: “Canaccord’s acquisition of Genuity more than satisfies our stated acquisition criteria: the Genuity partners are an excellent strategic and cultural fit with our business, and this transaction is immediately accretive to shareholders, increasing Canaccord’s trailing 12-month EPS on a pro-forma basis by more than 15%.
“Canaccord and Genuity have each built strong independent businesses, and we have enormous respect for each others’ accomplishments as well as a shared vision of how best to serve our clients. Our combination will propel us into the next phase of our growth, and position us as an aggressive, full-service competitor.”
Mr Kassie said: “We are excited to join Canaccord’s strong global platform. Like Canaccord, Genuity is a producer owned and driven business. Our firms share a deep commitment to creating long-term value for our clients and shareholders, and I look forward to our combination and continued success.”
Mr Brown said: “As the founder of the firm, I’m very proud of this transaction and how Canaccord is continuing to evolve. Canaccord was founded in 1950 and since then we’ve been building a firm that worked to put its clients first and demonstrate Canadian leadership on a global stage. This opportunity to join forces with Genuity makes that goal even more of a reality.”
However, the completion of the transaction is subject to various regulatory approvals.