Stifel Financial (SF) - Get Report is in talks to acquire Toronto-based GMP Capital in a deal that would see a U.S. company swallow one of the last sizable independent investment banks in Canada, The Globe and Mail reported.
Citing sources familiar with the situation, the Globe said the two sides could be on track to announce a deal as early as this week.
Stifel executives were reportedly in Toronto last week negotiating contracts with key GMP executives. One source told the Globe that the companies are looking to close a deal by September.
Stifel may be attracted to GMP by its robust relationships with cannabis industry players as well as its ongoing success in penning lucrative deals in the now-legal Canadian industry, though that line of business may also represent a challenge for Stifel, since investment banking activities in the cannabis sector are currently restricted in the U.S.
St. Louis-based Stifel is a full-service investment bank with approximately 7,100 employees. It posted a $385 million profit on revenue of $3 billion last year. The company has a $4 billion market capitalization.
GMP Capital posted a profit of C$15 million (US$11.25 million) in 2018 on revenue of C$178 million. Of particular interest to Stifel is the fim's investment-banking business, specifically its one-third ownership of wealth-management company Richardson GMP Ltd., which has assets under management of C$30 billion.
Stifel shares were up 0.16% at $56.66 in early trading on the New York Stock Exchange. Shares of GMP jumped more than 11% to C$2.26 in early trading on the Toronto Stock Exchange.