Canaccord Genuity Group Inc. Announces That HPS Will Invest in its UK Wealth Management Business
TORONTO: Canaccord Genuity Group Inc. (TSX:CF), (the Company) announces that HPS Investment Partners, LLC (HPS), on behalf of investment accounts and funds it manages has agreed to invest in the Company's UK wealth management division.
Subject to regulatory approval and other customary closing conditions, HPS will acquire Convertible Preferred Shares (the Convertible Preferred Shares) in the amount of GBP125 million (C$219 million1) to be issued by Canaccord Genuity Wealth Group Holdings (Jersey) Limited (CGWM UK), the parent company of the Company's wealth management operating subsidiaries in the UK, the Channel Islands and in the Isle of Man (the Transaction).
HPS is a leading global investment firm that seeks to provide creative capital solutions and generate attractive risk-adjusted returns for its clients. HPS has over US$68 billion of assets under management invested in both large and small companies across a variety of industries and sectors.
The net cash proceeds from the sale of the Convertible Preferred Shares of approximately GBP120 million (C$210 million) will be distributed by CGWM UK to the Company and used by the Company for corporate purposes to optimize shareholder value.
There will be no changes to the management or operations of CGWM UK as we continue to seek to expand and grow that business through both internal development and acquisitions. HPS expects to continue to be a strategic and financial partner to the business on future acquisitions and growth opportunities.
Partnering with HPS provides us with an opportunity to build upon the exceptional growth that our UK wealth management business has achieved under David Esfandi's leadership, said Dan Daviau, President & CEO of Canaccord Genuity Group Inc. The proceeds from this investment provide us with options and flexibility to redeploy capital towards strategies to advance our firmwide growth, enhance our long-term profitability, and provide optimal returns for our shareholders.
David Esfandi, CEO of CGWM UK adds, We are delighted to have found in HPS a long-term partner to further our strategic growth ambitions and consolidate CGWM UK's position as one of the leading wealth management firms in the UK and Crown Dependencies. Recognising the strength and potential of our business, this significant investment enhances our ability to invest in our client offering and our people and accelerate the future growth of CGWM UK to benefit our clients' evolving needs.
The principal value of the Convertible Preferred Shares is GBP125 million (C$219 million). On an as converted basis the Convertible Preferred Shares represent a 21.93% equity interest in CGWM UK. Cumulative dividends are payable by CGWM UK on the Convertible Preferred Shares at the greater of an annual 7.5% coupon and the proportionate share that such shares would receive, on an as converted basis, in respect of dividends paid to the Company by CGWM UK. The Convertible Preferred Shares carry customary minority rights in respect of CGWM UK governance and financial matters and call protections within the first five years. Further information in respect of the terms of the Convertible Preferred Shares is provided in the subsequent event note in the Company's Q3 fiscal 2021 unaudited interim condensed consolidated financial statements and in its MD&A for the period ending on December 31, 2020.
Completion of the Transaction will require the approval of the UK Financial Conduct Authority and each of the Financial Services Commissions/Authorities of Jersey, Guernsey and the Isle of Man, and is expected to occur in the first quarter of Company's fiscal year.
Spencer House Partners LLP and Canaccord Genuity Limited acted as financial advisers and Travers Smith LLP acted as legal adviser to Canaccord Genuity Group Inc., while Rothschild & Co acted as financial adviser to HPS in connection with the Transaction. (PRN/1 day ago) https://www.newkerala.com/business-world-news.php
