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GMP Capital in talks to buy Richardson GMP to focus on wealth management

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Stifel Financial Corp. has agreed to purchase the advisory and trading business of GMP Capital Inc. for approximately $ 70 million, adding the main unit of one of the last independent publicly traded securities firms in Canada.

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“We are merging with the best small and mid-cap company in the world, so the fit both culturally and in terms of products and services couldn’t be better,” the managing director of GMP Capital said on Monday, Harris Fricker, in a telephone interview. . “Given our focus on Canada and the fact that they have no operations or personnel in Canada, this was a dream deal for our people. “

GMP Capital has traditionally focused on providing investment banking services to small and medium-sized resource companies and, more recently, targeted blockchain and cannabis companies. The Toronto-based company has struggled over the past decade amid a downturn in the energy and mining industry and increased competition from major Canadian banks, circumstances that have led to the closure and buyout of others. independent securities companies.

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“Strong approval”

Fricker said he is joining Stifel as a Managing Partner for Canada, and that all capital markets activities in Canada and the UK will come under an agreement that benefits from “ strong endorsement ”from the company’s capital markets executives.

“If you’re a banker, all of a sudden you have leveraged finance products, loan products, cross-border mergers and acquisitions, a financial sponsorship practice, and a research foundation that spans 1,300 stocks in the United States and 700 in Europe, ”said Fricker. of the case. “If you are a banker, your toolbox has grown significantly and your ability to be relevant to your clients has transformed. “

GMP Capital has announced plans to focus on wealth management after the deal with Stifel and is in talks to buy 100% of Richardson GMP, which has assets of around $ 30 billion. Winnipeg-based James Richardson & Sons Ltd. and Richardson GMP advisors own two-thirds of the Toronto wealth manager that GMP Capital does not already own.

“We are going to spend money to acquire assets around this business that will help our retail franchise,” GMP Capital president Don Wright said in an interview, adding that such a “peripheral business” could include asset managers. “We are really going to make a big effort to expand this operation. “

With the help of Derek Wallbank

Bloomberg.com

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