GMP Capital to acquire Calgary firm FirstEnergy

Businesses to run under name GMP FirstEnergy

FirstEnergy Capital Corp., the Calgary investment firm founded by a small group of enterprising brokers in 1993, is being sold to GMP Capital Inc. in a deal valued at $98.6 million.

GMP Capital, in a release announcing the transaction late Thursday, said the combined energy businesses will operate as GMP FirstEnergy.

The new entity will remain headquartered in Calgary and include some FirstEnergy Capital executives.

“The opportunity to join forces with a highly respected industry leader that has been part of the fabric of Canada’s energy culture for nearly a quarter century was very appealing to us,” Harris Fricker, GMP’s president and CEO, said in a statement.

“This significant investment reconfirms our commitment to Calgary and the oil and gas sector and is aligned with our longer-term bullish view of the energy market.”

The planned transaction — expected to be completed this fall — includes payment of $58.9 million in GMP common shares.

FirstEnergy was started by nine partners — including well-known Calgary entrepreneur and philanthropist Brett Wilson — who left other firms to set up their own oil and gas-focused shop.

“The way we want to do business is: there’s a lot of fun to be had, money to be made and deals to be done,” Wilson told the Herald in 1993.

The firm now counts 91 employees in its Calgary and London offices working in investment banking, sales and trading and research. The company said it has closed more than $63 billion in equity financing deals in the energy sector since 2008.

FirstEnergy CEO John Chambers said the planned merger best serves its clients who will benefit from GMP’s “broader platform and greater access to efficient capital.” Chambers is to become vice-chairman and president of GMP FirstEnergy.

“GMP’s long-standing commitment to the energy sector and the Calgary community was important to us and our clients,” he said in the statement.

“We are also pleased that GMP recognizes the strength of the FirstEnergy brand built over the past two decades and I am confident that GMP FirstEnergy will become equally embedded in the Canadian energy culture.”

Jim Davidson, FirstEnergy’s executive chairman, will become deputy chairman of GMP Securities LP. Nicholas Johnson and Trent Boehm will also join GMP’s executive committee from FirstEnergy.

Toronto-based GMP has offices in Calgary, Montreal, New York, Houston, Miami, Dallas, Hong Kong and Beijing.

Its stock closed down 1.3 per cent Thursday at $5.14, prior to the announced transaction.