Canaccord Genuity Group Inc., through its wealth management business in the U.K. and British Crown dependencies, entered into a share purchase agreement to acquire Punter Southall Wealth Ltd., including the intermediary-facing brand Psigma, from Punter Southall Group Ltd.
Consideration to be paid to Punter Southall Group on closing will consist cash in the amount of £164 million, or C$277.5 million, and an equity interest comprising newly issued ordinary shares in Canaccord Genuity Group's wealth management business in the U.K. and British Crown dependencies. Punter Southall Wealth will be acquired by the wealth management business with a minimum level of regulatory capital, with any surplus distributed to Punter Southall Group by way of a pre-completion dividend, according to a news release.
In addition, retention and incentive awards comprising cash and equity in Canaccord Genuity Group's wealth management business in the U.K. and British Crown dependencies with a combined attributed value of approximately £6.0 million, or C$10.2 million, and subject to vesting conditions will be made to certain key employees of Punter Southall Wealth.
With the closing of the acquisition, it is expected that Canaccord Genuity Group's wealth management business in the U.K. and British Crown dependencies will add £100 million, or C$169.2 million, to its existing bank facility.
HPS Investment Partners LLC, on behalf of investment accounts and funds it manages, agreed to make an additional investment in Canaccord Genuity Group's wealth management business in the U.K. and British Crown dependencies on closing of the acquisition through the purchase of a new series of convertible preferred shares of the latter in the amount of £65.3 million, or C$110.5 million. Canaccord Genuity Group's wealth management business in the U.K. and British Crown dependencies will pay cumulative dividends 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.
On conclusion of the acquisition, it is expected that Canaccord Genuity Group will hold an approximate 66.9% equity equivalent interest in its wealth management business in the U.K. and British Crown dependencies on an as-converted basis.
Punter Southall Wealth is a vertically integrated wealth manager offering a range of advice and wealth management solutions to high net worth individuals, including bespoke portfolios, managed portfolio services and a multi-asset fund range, complemented by a strong intermediary distribution channel. Currently operating as a subsidiary of Punter Southall Group, Punter Southall Wealth has approximately £5.0 billion, or C$8.5 billion, in client assets and is forecast to generate annual revenue of about £33.7 million, C$57.0 million, in the year ending Dec. 31, according to the news release.
Fenchurch Advisory Partners is serving as financial adviser and Farrer & Co LLP is acting as legal adviser to Canaccord Genuity Group's wealth management business in the U.K. and British Crown dependencies. Spencer House Partners is serving as financial adviser and Ashurst is acting as legal adviser to Punter Southall Group.
