Through its wealth manager in Britain, Canaccord announced on Thursday that it has entered into an agreement with the Royal Bank of Scotland PLC to acquire Edinburgh-based Adam & Company for £54-million, or the equivalent of $93.4-million.
The deal is subject to regulatory approval and is expected to take place at the end of the second quarter.
The acquisition was announced two months after Canada’s largest independent investment dealer sold a 22-per-cent stake in its British wealth-management business to U.S. private equity fund HPS Investment Partners LLC. The HPS deal raised the equivalent of $210-million, an amount Canaccord CEO Dan Daviau said was earmarked for expanding the wealth-management arm in Britain.
“[HPS] gave us the balance-sheet capacity to continue to facilitate consolidation in the U.K. sector – that is exactly why we did the deal,” said Mr. Daviau in an interview. “We have a pretty active pipeline of acquisitions and [Adam & Company] is just the first of many to come”
Canaccord has done several acquisitions within Britain, but Thursday’s deal is the first time the wealth manager has moved into Scotland.
Currently, Canaccord has $52-billion of client assets under management in Britain and Europe, up 8 per cent over the past year, and oversees total client assets of $85-billion.
Adam & Company’s investment management business has grown about 45 per cent over the past five years and now manages about £1.7-billion ($2.9-billion) in clients assets.
The acquisition represents a “unique opportunity” for Canaccord to enter the Scottish market with a deeply established franchise, the company said in a release.
Canaccord intends to continue to operate the business under the name of Adam & Company and says the existing direct relationships between clients and portfolio managers will not be affected.
Graham Storrie, managing director of Adam & Company, will remain in a leadership role and Adam & Company’s investment team will become active members of Canaccord’s existing investment committees in Britain.
“To build on the success of Adam & Company’s investment management business it was essential to find a buyer who shared our investment philosophy and strategic ambitions for the future,” said Mr. Storrie, in a statement.
With reports from Andrew Willis
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