Two of Canada’s top money managers are selling off the vast majority of their shares in the independent wealth management firm they founded, in a $122 million offering that will leave Ira Gluskin and Gerald Sheff a tidy retirement package.
In a regulatory filing, the firm said that the pair, as well as charitable foundations they established, have entered a deal to sell to a syndicate of underwriters led by RBC Capital Markets and TD Securities. On a bought deal basis, they will sell an aggregate of 6.4 million subordinate voting shares of the company at $19.00 per share for gross proceeds of approximately $122 million. After the sale the founders will hold about 2% of the firm’s shares.
The offering is expected to close on or about October 16, subject to customary conditions. Upon closing of the offering, they would exercise their rights to cause any remaining outstanding multiple voting shares to be converted into subordinate voting shares. This will leave the company with only one class of issued and outstanding equity securities, entitling the holders thereof to vote on all matters requiring shareholder approval.
In 2009 Sheff and Gluskin relinquished their chief executive officer and chief investment officer responsibilities but remained involved with the company in an advisory capacity. They have advised the company that the offering and their consequential relinquishment of control, is the next logical step in that transition process.
The founders intend to continue to provide support to the company’s leadership team. After the close of the offering, management and employees – other than the selling shareholders – will continue to own approximately 23% of the company’s outstanding shares. Management has also expressed an intention to increase this percentage interest by participating in the offering on the same terms as other investors.