Stifel Financial has agreed to acquire the capital markets business from Canada-based independent investment banking franchise GMP Capital in an all cash transaction.
Image: Stifel global headquarters in St. Louis, Missouri. Photo: courtesy of Whartonmba.
Established in 1995, the capital markets business of GMP provides a range of investment banking services to the corporate clients and institutional investors.
Via its offices in Canada and the UK, the business offers services such as equity capital raising, mergers and acquisitions expertise, institutional sales and trading and research services
As per terms of the deal, Stifel will purchase the bulk of GMP’s capital markets business, except the US cannabis and certain clearing businesses.
The deal value will be determined at closing, and calculated as the tangible common equity of the business and a premium of $33.8m (£26.9m), subject to adjustment. The purchase price would have been around $52m (£41.4m) as of 30 April 2019.
Stifel Financial chairman and CEO Ronald Kruszewski said: “The acquisition of GMP’s capital market business is the latest step in the build out of our premier middle market investment banking offering.
“Over the past 13 years, we have grown our annual institutional net revenues from roughly $60 million to more than $1 billion through a combination of strategic acquisitions and strong organic growth.”
Subject to customary closing conditions, the deal is expected to be completed in the fourth quarter of this year.
Upon closing of the deal, GMP CEO Harris Fricker and other key personnel will join Stifel.
Fricker said: “The combination with Stifel is immensely attractive to us given it provides greater critical mass and access to significantly enhanced cross border capabilities to better serve our clients.”
Based in St. Louis of Missouri, Stifel Financial carries out its banking, securities, and financial services business through several wholly owned subsidiaries.
Its broker-dealer affiliates offer securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities.
Based in Toronto, GMP offers a range of financial products and services via two integrated reporting segments such as the capital markets and the wealth management.