Overview

Macquarie Group to acquire global energy advisory firm, Tristone Capital Global Inc.

29 May 2009

Macquarie Group ("Macquarie") (ASX:MQG) today announced it has entered into an agreement to acquire Tristone Capital Global Inc. ("Tristone"). The acquisition will substantially enhance Macquarie's energy offering by integrating Tristone’s energy advisory and capital markets capabilities within Macquarie's global resources activities. This acquisition will create an integrated energy platform, offering advisory, capital markets, research and trading expertise.

With offices in Canada, the United States, the United Kingdom and Argentina, Tristone is an independent energy advisory firm providing fully integrated corporate finance, acquisitions & divestitures (“A&D”), equity capital markets (“ECM”), and sales, trading and research services. Tristone focuses exclusively on the global energy sector, providing technical and financial services to exploration and production companies, oilfield service and midstream companies, government entities, royalty trusts, limited partnerships and institutional investors worldwide. Tristone employs approximately 170 people.

John Prendiville, Global Head of Resources for Macquarie Capital said: “Tristone is a highly regarded global independent energy advisory firm and we are delighted to have them join us. Macquarie Capital has had a long and very successful history in the resources sector globally, but have been keen for some time to expand our reach, particularly in the energy space. The acquisition of Tristone creates a fully integrated global energy group that can offer a full suite of products to our clients in whatever region they exist.

"The combined business gives us an increased presence in vital energy-sector hubs around the world, particularly in Calgary, Houston, Denver and London, and a new Macquarie presence in Buenos Aires. This will greatly enhance Macquarie's global advisory network of more than 210 dedicated resources and energy sector professionals, supported by Macquarie’s growing global ECM franchise. By combining the research platforms, Macquarie will cover approximately 250 energy-related companies in every major oil and gas basin in the world," Mr Prendiville said.

Paul Donnelly, President and CEO of Macquarie Capital Markets Canada, said: "Macquarie's investment in Tristone's team of highly respected professionals is consistent with our approach of providing clients with extensive industry expertise and international reach in key global industries. It continues the expansion of our advisory and capital markets activities and other related industries including leading pipeline and utility companies who are an important part of our infrastructure business."

George Gosbee, Chairman, President and CEO of Tristone said: "Partnering with Macquarie represents an outstanding opportunity for both Tristone and its staff. Joining a larger, yet like-minded financial institution such as Macquarie is the logical evolution of our business. This transaction is especially attractive in light of the additional opportunities and resources it will offer our clients and our staff. Macquarie’s global breadth and expertise in resources will offer our existing clients access to its record of success and innovation."

Following a transition period, Tristone will be fully integrated into Macquarie, with its acquisitions and divestitures division to be branded "Macquarie Tristone"1. Under Macquarie ownership, the majority of Tristone’s employees will remain in their existing locations and will be joined by other locally based Macquarie staff. Macquarie Capital’s Northern Hemisphere energy business will be headed by Dan Cristall, and will be chaired by George Gosbee.

The consideration for the acquisition is expected to be approximately C$116 million, comprising two separate components:

1. C$57 million will be paid to the vendors in cash upon financial close (“Close”) as adjusted to reflect the consolidated net tangible assets of Tristone at that time.

2. C$59 million payable in exchangeable shares (“Exchangeable Shares”). A subsidiary of Macquarie will issue the Exchangeable Shares to the vendors. These Exchangeable Shares will be held in escrow and released over a 5 year period and the final number is subject to adjustment based on the performance of the Tristone business over a two year period following Close. Upon release they will be exchangeable on a one-for-one basis for ordinary Macquarie shares (“MQG Shares”), subject to certain conditions.

The number of Exchangeable Shares issued at Close may be adjusted up or down, depending on the level of advisory revenues earned over a two year period from Close and certain other conditions.

In addition, approximately C$15 million of retention securities in the form of Exchangeable Shares and options to purchase Exchangeable Shares will form a retention pool and will be allocated to certain Tristone employees joining Macquarie. This retention pool will be released in equal portions on the 3rd, 4th and 5th anniversaries of Close and subject to continuing employment with Macquarie.

No more than 4 million MQG Shares will be issued for Exchangeable Shares; any consideration exceeding that amount will be settled in cash in accordance with the terms of the Exchangeable Shares. Macquarie shareholder approval for the issue of up to the 4 million MQG Shares will not be sought.

A prospectus will be prepared and issued by a subsidiary of Macquarie in respect of the Exchangeable Shares and options to purchase Exchangeable Shares. Filing of the prospectus will be a condition to Close.

The impact on Macquarie’s Tier 1 capital ratio as a result of the acquisition is anticipated to be immaterial. Close is expected to occur during the third quarter of 2009 and is subject to regulatory approvals and other customary closing conditions.

About Macquarie
Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Macquarie’s main business focus is making returns by providing a diversified range of services to clients. Macquarie acts on behalf of institutional, corporate and retail clients and counterparties around the world. Macquarie Group Limited is listed in Australia (ASX:MQG) and is regulated by APRA, the Australian banking regulator, as the owner of Macquarie Bank Limited, an authorized deposit taker. Macquarie’s activities are also subject to scrutiny by other regulatory agencies around the world.

Founded in 1969, Macquarie operates in more than 26 countries and employs approximately 12,700 people. Assets under management total more than $C213 billion (as of March 31, 2009).

Macquarie has had a permanent and growing presence in Canada since opening its first office in 1998. Macquarie employs more than 420 people in Canada with offices in Toronto, Vancouver, Calgary and Montreal. Macquarie's activities in Canada include advisory and capital markets, specialized asset management, lending, financial markets and institutional broking.

Additional information can be found at www.macquarie.com/ca

1 Subject to obtaining necessary regulatory approvals

For further information, please contact:

Stephen Yan
Corporate Communications
Macquarie Group
Tel: 1 212 231 1310
Email: stephen.yan@macquarie.com