To buy for the transfer agent TMX EFH company $ 64 million

REUTERS

TORONTO

TMX GROUP Ltd Equity financial Holdings Inc's (EFH) will acquire transfer agent and corporate trust services business to expand its portfolio of services, the Toronto Stock Exchange operator said recently.

The company said it would pay about $ 64 million for the company, which mainly helps public companies keep track of the owners of their stocks and bonds.

TMX shares ended up 1.4 percent at C $ 69.99, while financial stocks shares rose more than 25 percent to C $ 10.05.

TMX Chief Executive Tom Kloet said his company is well positioned to build on the success of the company, financial wealth if the deal will allow it to build on its relationships with listed entities and the capital markets Advisory community.

Paul Holden, an analyst at CIBC World Markets, described it as a small bolton acquisition that fits well with existing business and grow their TMX should help.

He estimates the deal could increase profit by 2 percent in the near future, or 6 cents per share, assuming that the deal was only cash and the company will earn C $ 3 million.

But National Bank financial analyst Shubha Khan saw the deal as revenue-neutral and said the price viewed 38 times, average income for the past five years.

The move comes at a time when TMX, which majority-owned by a consortium of Canadian banks, insurance companies and pension funds, targeted trade and Promotional activities is slow.

The Exchange operator earlier this month back away from talk that it would look beyond Canada for growth through acquisitions.

TMX, which also operates the TSX Venture Exchange for small capitalization stocks, the Montreal Exchange for derivatives and other markets, offering customers already a number of services, such as investor relations and market analytics.

"With this acquisition we further broaden our portfolio of services and improve the value we can deliver to public companies," the TMX Group Head of equities, Kevan Cowan, said in a statement.

Equity Financial, in a separate statement, said it decided to sell the business so that it stands on are fast growing retail mortgage lending and deposit operations can concentrate.

"We have made the strategic decision to move only in the mortgage and deposit business and now have the necessary capital to invest in and support our new business strategy," said Equity financial CEO Paul Smith.

TMX said the company that is acquiring currently offers services to 700 customers, most of them listed on the Toronto Stock Exchange or TSX Venture Exchange.

The company expects the company was profitable and generated revenue of C $ 17 million in 2012, to promote his earnings in the first year after the end of the deal. The transaction, expected to close around the end of March or early april, is closing under certain conditions, including certain permissions and a financial equity shareholder vote.

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