The deal will help TMX Group grow its footprint in the transfer agency and corporate trust business
TMX Group, has agreed to acquire AST Investor Services Inc. (Canada), and its subsidiary AST Trust Company (Canada) for CAD165m ($123.2m).
The Canadian financial services company will acquire the businesses from a subsidiary of Armor Holdco, which in turn, is a portfolio firm of Pacific Equity Partners (PEP).
The AST businesses cater to Canadian public and private companies with transfer agency, corporate trust, equity plan solutions, structured finance, and proxy related services.
TMX Group to strengthen its TSX Trust business through the deal
TMX Group CEO John McKenzie said: “The acquisition of AST Trust Company (Canada) will significantly strengthen TMX’s ability to serve the needs of companies across the marketplace by bringing to our TSX Trust business a proven team of industry professionals, and a wider range of products and technology capabilities.
“From a strategic perspective, this transaction will help to accelerate TSX Trust’s growth and enhance its competitive position, deepening relationships with existing clients and broadening the scope and scale of its service offerings.”
AST has nearly 150 employees in offices across Toronto, Montreal, Vancouver, and Calgary.
The transaction excludes Armor’s operations in the US, which include American Stock Transfer & Trust and D.F. King & Co.
AST Trust Company (Canada) chairman Marty Flanigan and Armor president and CEO Marty Flanigan said: “I am very confident that the Canadian business will continue its record of success going forward under TMX ownership.
“This transaction provides scale and creates value for our clients, partners and employees.”
The consideration to be paid for the acquisition includes CAD30m ($22.4m) of cash for regulatory and non-regulatory purposes.
The deal, which is subject to regulatory approvals under the Competition Act (Canada) and Trust and Loan Companies Act (Canada), is anticipated to be wrapped up within six to twelve months.
TMX Group is the operator of the Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange, Montréal Exchange, The Canadian Depository for Securities, Canadian Derivatives Clearing, and others.