Press Release

Macquarie Group to acquire Blackmont Capital

Seattle, 26 October 2009

  • Leading Canadian independent investment dealer with $C7.6bn in assets under administration
  • Highly regarded team of more than 130 financial advisors located in 13 offices across Canada
  • Provides Macquarie with an established and growing Canadian wealth management platform
  • Rounds out Macquarie's existing Canadian capital markets business with the addition of retail distribution
  • Macquarie to grow advisor numbers and deepen Blackmont's advisor client offering with additional growth funding, new investor products, Canadian and international equity research and deal flow opportunities

Macquarie Group ("Macquarie") (ASX: MQG; ADR: MQBKY) today announced that it has entered into an agreement to acquire Blackmont Capital Inc. ("Blackmont") from CI Financial (TSX: CIX-T) for $C93.3 million. The acquisition provides Macquarie with an established and growing Canadian wealth management business and will add additional retail distribution to Macquarie's existing capital markets and product offerings in Canada.

Headquartered in Toronto with retail branches in 13 locations, Blackmont is one of the largest independent, full service investment dealers in Canada. With approximately 450 employees including a network of more than 130 investment advisors, Blackmont's investment dealer division offers a full range of investment services to retail clients. Blackmont investment advisors offer custom solutions for clients with products ranging from equities and fixed income to insurance and estate solutions.

The firm also operates a 60 person capital markets division, which provides institutional and corporate clients with capital markets, advisory, equity research, sales and trading services, all of which will remain with CI Financial.

Peter Maher, Global Head of Macquarie's Banking and Financial Services Group, said: "Retail brokerage and tailored financial advice is a business Macquarie knows well and we've been impressed by the team at Blackmont. Most importantly, we share a common focus on client service, innovation and risk management.

"Macquarie has been involved in the Canadian financial services market for 12 years and we're attracted to the market's well-established advisor model, its transparency and innovative product mix. We think there is a real opportunity in the Canadian market for a differentiated, independent client offering.

"This acquisition gives us the opportunity to work with a strong leadership and advisor team, build our client offering, add further quality advisors to our team and be seen as an innovative, independent provider with an international presence," said Mr Maher.

Blackmont will become part of Macquarie's Banking and Financial Services Group and will be rebranded "Macquarie Private Wealth";. The business will continue to be run by Blackmont CEO, Bruce Kagan while Macquarie Executive Director and former Head of Macquarie Full Service Broking, Earl Evans, will relocate to Canada and become President of the business.

Through its team of over 2,800 staff globally, Macquarie's Banking and Financial Services Group provides retail services to more than 850,000 clients with over $C108 billion of client assets under advice, administration or management. The Group offers clients a diverse range of wealth management products and services including financial advice, mortgages, broking, online trading and private banking.

"Put simply, this transaction will enable us to deliver more to our people and clients. Macquarie brings to Blackmont a strong balance sheet, a commitment to growth, broad equity research and access to new products and proprietary deal flow. Their global knowledge and reach will help Blackmont advisors continue to set the new benchmark in terms of client service and offer more choice to the Canadian market," said Bruce Kagan, Blackmont CEO.

Paul Donnelly, President and CEO of Macquarie Capital Markets Canada Ltd., added that following the acquisition, Macquarie will have a broad-based business in Canada with total employee numbers approaching 1,000. "This acquisition rounds out Macquarie's capital markets capability in Canada by adding retail distribution."

 

Transaction Terms and Timing

Macquarie will pay $C93.3 million in cash to acquire the shares of Blackmont Capital Inc., which operates Blackmont's investment dealer division. The impact on Macquarie's regulatory capital surplus as a result of the acquisition is anticipated to be immaterial. The transaction is expected to close early in the first quarter of 2010 and is subject to regulatory approvals and other customary closing conditions.

 

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