Vancouver-based Canaccord Financial Inc. (TSX:CF) is acquiring Toronto's Genuity Capital Markets for $285.9 million.
The deal will greatly expand Canaccord's investment banking arm, Canaccord Adams, which will be renamed Canaccord Genuity upon closing of the deal.
Canaccord's share price closed at $9.42 on Thursday, rising 9.5% after announcement of the deal.
Founded in 2005, Genuity has been involved in more than 106 advisory assignments with an average transaction size of $392 million since 2007. Last year, Genuity was lead manager on 13 public underwriting deals with an average deal size of $109 million.
It reported annual revenue of $100.6 million and $31.9 million in pre-tax profit from its 135 employees in offices in Toronto, Vancouver, Montreal, Calgary, Boston and New York.
As part of the deal, Genuity's ten largest partners have entered into employment agreements as well as non-competition, non-solicitation and standstill agreements. The company's other partners are also expected to stay on after the deal's closing.
Canaccord is purchasing Genuity with 26.5 million Canaccord shares and $30 million in cash. In addition, the sellers will receive up to $28 million as a working capital adjustment after the deal closes.
Canaccord's share price range during the past week: between $8.47 and $8.90; 52-week high: $11.87; 52-week low: $3.86.