Pater­sons’ $25m deal

The West Australian - - WESTBUSINE­SS - SEAN SMITH

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.

Pic­ture: Me­gan Pow­ell

Michael Man­ford and Mar­cus Free­man yes­ter­day.

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