Follow The Money: Canaccord Buys Australian Securities Firm
With more deal action in the southern hemisphere, Canaccord Genuity Group is paying $17.6 million for Australian-based Paterson Securities.
Announced today, Canaccord said the deal will give the company an edge in finding customers Down Under. Patersons Securities has operations in wealth management and capital markets. Canaccord also has operations in Australia.
"This business combination creates a leading Australian capital markets, stockbroking and wealth management business with a powerful offering for our respective corporate, institutional, and private clients," said Marcus Freeman, CEO of Canaccord Genuity Australia.
Australia caught the industry's notice last month when St Barbara acquired Atlantic Gold, which operates in the Maritimes, for $536 million. Reuters reported that Australian producers are "cashed-up" due to a favorable currency and a focus on cashflow.
Oreninc CEO Kai Hoffmann concurs and adds that alternative investments are crowding out investment.
"Yet another sign that the Canadian mining markets are currently not very attractive," said Hoffmann.
"The Australian broker Macquarie recently pulled out of Canada for a lack of returns, now the well-known Canadian broker Canaccord is acquiring a very active participant in the mining space Down Under," said Hoffmann.
Australia-based Macquarie shut down its equity sales, trading and research businesses across Canada in April.
"With a lack of competition from cannabis companies, Australian mining markets are on fire and investors are profiting from record high gold prices in Australian dollar terms," said Hoffmann.
Canaccord said Patersons earned net revenue of $43.7 million (A$61.8 million) year end. The wealth management business of Patersons has more than 100 investment advisors with $9.49 billion (A$13.6 billion) in client assets under advice.
Regarding the deal, cash consideration of $17.4 million (A$25.0 million) will be payable on closing. Following the closing of the transaction, Canaccord Genuity says it will implement an equity incentive program for key Patersons employees.Creative Commons image of Australia map courtesy of Marko Mikkonen