GMP Capital announces acquisition of FirstEnergy Capital

To enhance its positioning in Canadian energy and independent brokerage, GMP Capital Inc. has agreed to acquire the energy industry leader

In an August 4 release, GMP Capital Inc. announced its agreement to acquire FirstEnergy Capital Corp. (FirstEnergy). 

Established in 1993, FirstEnergy is a global energy industry leader, providing financial advisory and investment services to corporate clients and sophisticated investors worldwide. Since 2008, it has completed over $63 billion in equity financing transactions in the energy sector and has advised on 159 transactions with an aggregate value of $31 billion.

Under the definitive purchase agreement, GMP will acquire FirstEnergy for $98.6m, consisting of around $58.9m worth of GMP common shares–made up of approximately 11.1 million restricted shares–with the remainder being paid by GMP via an unsecured promissory note.

The combined energy businesses will be operated by GMP under the "GMP FirstEnergy" brand.

"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,” commented GMP President and CEO Harris Fricker. “This significant investment reconfirms our commitment to Calgary and the oil and gas sector... Today's announcement also marks a significant demarcation in the independent brokerage space and transforms the scale of our energy business in a very meaningful way.”

Citing GMP’s broader platform and greater capital access, FirstEnergy CEO John Chambers is similarly optimistic. “We are also pleased that GMP recognizes the strength of the FirstEnergy brand… I am confident that GMP FirstEnergy will become equally embedded in the Canadian energy culture”

Certain key members of FirstEnergy’s management are expected to assume leadership roles at GMP upon the deal’s closing. These include Mr. Chambers, who will serve as Vice Chairman and President of GMP FirstEnergy, and FirstEnergy Executive Chairman Jim Davidson, who will become Deputy Chairman of GMP Securities LP.

The transaction, subject to customary closing conditions and regulatory approval, is expected to be completed by this fall.

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