August 4, 2016 - 7:53 PM EDT
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GMP Capital Inc. to acquire FirstEnergy Capital

GMP Capital Inc. to acquire FirstEnergy Capital

Canada NewsWire

  • Enhances GMP's positioning in Canadian energy and the independent brokerage space

  • Combined energy businesses will be rebranded "GMP FirstEnergy" and continue to be headquartered in Calgary

  • Key members of FirstEnergy's management team will join GMP's Executive Committee

TORONTO, Aug. 4, 2016 /CNW/ - GMP Capital Inc. (GMP) (TSX: GMP) announced today that it has agreed to acquire FirstEnergy Capital Corp. (FirstEnergy).  Established in 1993, FirstEnergy is an industry leader in the global energy sector providing financial advisory and investment services to a broad range of corporate clients and sophisticated investors worldwide.   Since 2008, FirstEnergy has completed over $63 billion in equity financing transactions in the energy sector and has advised on 159 transactions with an aggregate value of $31 billion. The firm has 91 employees in its Calgary and London offices across investment banking, sales and trading and research.  GMP will operate the combined energy businesses under the "GMP FirstEnergy" brand.

Under the definitive purchase agreement (the Purchase Agreement), GMP will acquire FirstEnergy for total consideration on closing of $98.6 million, consisting of approximately $58.9 million in restricted GMP common shares (the Restricted Shares) with the remainder being paid by GMP through the issuance of an unsecured promissory note.  The number of common shares to be issued by GMP will be 11,161,671 Restricted Shares, which is based on the volume-weighted average closing price of GMP common shares on the Toronto Stock Exchange for the 10 days prior to the date of the Purchase Agreement.  Upon closing, a significant portion of the common shares issued to FirstEnergy shareholders will be subject to an escrow agreement, and will be released on a pro-rata basis over a four-year period. 

Commenting on the transaction, Harris Fricker, GMP's Chief Executive Officer and President, said "The opportunity to join forces with a highly respected industry leader that has been part of the fabric of Canada's energy culture for nearly a quarter century was very appealing to us.  This significant investment reconfirms our commitment to Calgary and the oil and gas sector and is aligned with our longer-term bullish view of the energy market.  Today's announcement also marks a significant demarcation in the independent brokerage space and transforms the scale of our energy business in a very meaningful way.   We look forward to welcoming our new business partners and supporting them as they continue to build on their strengths and expertise in energy."

"This strategic partnership with GMP, given its broader platform and greater access to efficient capital represents the best path forward for our valued clients and business partners, with the merger of two similar cultures," said John Chambers, Chief Executive Office of FirstEnergy.  "GMP's long-standing commitment to the energy sector and the Calgary community was important to us and our clients.  We are also pleased that GMP recognizes the strength of the FirstEnergy brand built over the past two decades and I am confident that GMP FirstEnergy will become equally embedded in the Canadian energy culture. We are committed to a seamless integration to ensure that the exceptional service and execution, to which our collective clients have become accustomed to, is not disrupted." 

Upon closing, certain key members of FirstEnergy's management team will assume leadership roles at GMP.  Jim Davidson, FirstEnergy's Executive Chairman, will become Deputy Chairman of GMP Securities L.P., and John Chambers, FirstEnergy's CEO, will serve as Vice Chairman and President of GMP FirstEnergy.  In addition, Nicholas Johnson will serve as Vice Chairman and Co-Head Energy Investment Banking and Trent Boehm will serve as Vice Chairman and Head of Energy Capital Markets.  Joining GMP's Executive Committee from FirstEnergy will be John Chambers, Nicholas Johnson and Trent Boehm

Completion of the transaction is subject to a number of customary closing conditions, including regulatory approval.  The transaction is expected to be completed in the fall of 2016.


This press release contains "forward-looking information" as defined under applicable Canadian securities laws.   This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts, as well as statements regarding the acquisition of FirstEnergy.  Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.

Forward-looking information is not a guarantee of future performance and is subject to numerous risks and uncertainties, including those described in this press release. The acquisition of FirstEnergy is subject to various risks and uncertainties, including that the conditions to closing will not be satisfied or waived or that the transaction will otherwise not be consummated. In addition, GMP's primary business activities are both competitive and subject to various risks. These risks include market, credit, liquidity, operational and legal and regulatory risks and other risk factors including, without limitation: variation in the market value of securities, volatility and liquidity of equity and fixed income trading markets, volume of new financings and mergers and acquisitions, dependence on key personnel and sustainability of fees. Other factors, such as general economic conditions, including interest rate and exchange rate fluctuations, may also have an effect on GMP's results of operations. Many of these risks and uncertainties can affect GMP's actual results and could cause its actual results to differ materially from those expressed or implied in any forward-looking information disclosed by management or on its behalf.  For a description of additional risks that could cause our actual results to materially differ from our current expectations, see "Risk Management" and "Risk Factors" in the Second Quarter 2016 MD&A and "Risk Factors" in GMP's annual information form. These risks and uncertainties are not the only ones facing GMP together with its consolidated operations controlled by it and its predecessors (GMP Group).  Additional risks and uncertainties not currently known to us or that we currently consider immaterial may also impair the operations of the GMP Group.  Material assumptions or factors underlying the forward-looking information contained in this press release include, but are not limited to, "Business Environment and Outlook", "Second Quarter 2016 Financial Highlights", "Segment Results ", "Liquidity and Capital Resources" sections of the Second Quarter 2016 MD&A. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this press release may be considered a "financial outlook" for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this press release. The forward-looking information contained in this press release is made as of the date of this press release, and should not be relied upon as representing GMP's views as of any date subsequent to the date of this press release. Except as required by applicable law, management and GMP's Board of Directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

GMP is a leading independent diversified financial services firm headquartered in Toronto, Canada, providing a wide range of financial products and services to a global client base that includes corporate clients, institutional investors and high-net-worth individuals in two integrated reporting segments. The Capital Markets segment provides investment banking, including advisory and underwriting services, institutional sales and trading and research through offices located in Toronto, Montreal, Calgary, New York, Houston, Miami, Dallas, Hong Kong and Beijing. Wealth Management consists of GMP's non-controlling ownership interest in Richardson GMP Limited. Richardson GMP Limited, Canada's largest independent wealth management firm, is focused on providing exclusive and comprehensive wealth management and investment services delivered by an experienced team of investment professionals. GMP is listed on the Toronto Stock Exchange under the symbol "GMP". For further information, please visit our corporate website at

Established in 1993, FirstEnergy is an industry leader in the global energy sector providing financial advisory and investment services to a broad range of corporate clients and sophisticated investors worldwide.   Our technical expertise and comprehensive understanding of oil and gas assets around the globe allow us to deliver superior advice and execution to our clients.

SOURCE GMP Capital Inc.

GMP Capital Inc., Rocco Colella, Director, Investor Relations, 145 King Street West, Suite 300, Toronto, Ontario M5H 1J8, Tel: (416) 941-0894; Fax: (416) 943-6175, [email protected] or [email protected] CNW Group 2016

Source: Canada Newswire (August 4, 2016 - 7:53 PM EDT)

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