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Canaccord Genuity Group seeks to up stake in Australian biz

Canaccord Genuity Group Inc. has entered a nonbinding letter of intent to acquire an additional 30% of equity stake in its Australian capital markets and wealth management business, Canaccord Genuity (Australia) Ltd.

The transaction will increase Canaccord Genuity Group's ownership in Canaccord Genuity (Australia) to 80% from 50%. Canaccord Genuity made its initial investment in Australia-based BGF Equities in 2011, and the capital markets and wealth management businesses adopted the Canaccord brand.

The deal consideration of A$36 million ($27.6 million) is comprised of A$15.0 million in cash, a A$6.0 million note payable, and the issuance of approximately 2.3 million Canaccord Genuity Group shares valued at A$15 million. The shares will be subject to a three-year escrow arrangement with annual releases.

The transaction is pending a definitive agreement, necessary closing conditions and regulatory approval, including TSX approval.

The deal positions the Canaccord Genuity Group to explore opportunities to expand its wealth management businesses and increase contributions from its capital markets business in Australia, President and CEO Dan Daviau said in a statement.