One of Western Canada's top three independent investment firms, Goepel McDermid Inc., has agreed to be swallowed by U.S. financial services giant Raymond James Financial in a transaction worth about $130-million.
Raymond James, which was founded in 1962 and trades on the New York Stock Exchange, has signed a letter of intent requiring it to pay $115-million in Raymond James shares for the employee-owned brokerage, and $17.5-million in bonus share payments to key Goepel employees over the next few years.
The deal leaves Peter Brown's Canaccord Capital Corp. as the only remaining independent Howe Street brokerage firm with any national presence in Canada.
Yorkton Securities Inc., the other member of the "Big Three" Howe Street firms, is now based in Toronto.
Yesterday, Goepel McDermid chief executive officer Kenneth Shields said he has been considering the possibility of a merger since meeting Raymond James Financial's chairman, Tom James, in 1998.
"Our firms are remarkably similar -- we share a dedication to personalized client service and are both firmly committed to the autonomy of our people," Mr. Shields said.
The deal is being announced almost three years after Goepel Shields & Partners Inc. merged with McDermid St. Lawrence Securities Ltd., to become Goepel McDermid Inc. -- a company which at the time had more than $100-million of revenue and 475 on staff, including 275 brokers.
The company now has 770 employees in 22 offices across the country and generates annual revenue of $150-million.
It also comes after Merrill Lynch and Co. Inc. of New York acquired Midland Walwyn Inc. in a $1.2-billion takeover in 1998.
Florida-based Raymond James, which ranks as one of the largest financial services firms in the United States with more than 1,700 locations and 4,400 financial advisers, said approximately 25 to 30 per cent of the purchase price will be deferred for 24 months and will be subject to the satisfaction of certain conditions.
It did not elaborate.
The acquisition, which has been approved by the boards of directors of both firms pending completion of due diligence and regulatory approval, is expected to close in the fourth quarter of this year.
Mr. James said the company views Canada as a growing market for investment services.