Patersons’ $25m deal
Shareholders in WA’s oldest stockbroking firm, Patersons Securities, will share about $25 million as part of an agreed buyout by fast-growing Canadian financial services group Cannacord Genuity.
The proposed acquisition will dramatically expand Cannacord’s presence in Australia, adding more than 230 staff to its network, lifting adviser numbers from just 13 to nearly 115 and expanding funds under management to $15 billion.
Cannacord said the tie-up was consistent with a strategic push into wealth management, doubling the group’s funds under management to $65 billion over the past three years.
“This is absolute on strategy for us,” said the group’s Australian boss, Marcus Freeman, who was in Perth yesterday to brief Patersons staff.
“We had a look over the landscape here in Australia, and there’s a connection, a cultural alignment and a strategic fit with Patersons,” he said.
The group, which last year took on sponsorship of the Diggers & Dealers conference in Kalgoorlie-Boulder, believes the combination will create a formidable business in wealth management, capital markets and stockbroking, with a national presence and an expanded research coverage.
Patersons grew out of an accounting business founded by James Paterson in 1903. The business entered stockbroking in 1922 and expanded nationally during an aggressive growth spurt during the 1990s.
Although it has been reined in over recent years, the Patersons network still totals 10 offices in major capital cities and regional Queensland and WA.
Patersons’ long-serving executive chairman and major shareholder, Michael Manford, said the tie-up with Cannacord would give the WA group access to international funds and expertise. “It’s about capital to grow the business, a global reach . . . and access to global institutions and expertise,” he said.
Mr Freeman will head up the expanded Cannacord group in Australia, with Mr Manford running the wealth management business, which will be known as CG Patersons.
The deal will be effected via a scheme of arrangement that has to be approved by shareholders and is expected to be finalised in October.
Some 75 per cent of Patersons is owned by management and staff, including Mr Manford and fellow company veteran and corporate finance chief Aaron Constantine. Other major shareholders include the Brunei Investment Agency, which took up a stake in 2009.
Shareholders accounting for about 60 per cent of Patersons have pledged support for the deal, which has to be approved by 50 per cent of investors accounting for 75 per cent of its shares.
Michael Manford and Marcus Freeman yesterday.