Toronto, October 3, 2016 - GMP Capital Inc. (GMP) (TSX: GMP) announced today that it has completed the previously announced acquisition of FirstEnergy Capital Corp. (FirstEnergy), an industry leader in the global energy sector with nearly a quarter century of transactional expertise. The combination of GMP and FirstEnergy creates a premier franchise in the global energy and Canadian independent brokerage spaces.
• Optimally positioned as a premier franchise in the independent brokerage space
• GMP’s combined energy businesses will operate under the GMP FirstEnergy brand
• GMP expands its Executive Committee
Concurrent with closing, GMP combined its existing energy franchise and FirstEnergy, rebranded as GMP FirstEnergy. FirstEnergy CEO John Chambers will serve as President of the combined energy business from Calgary, where GMP FirstEnergy is headquartered. GMP’s Executive Committee also welcomes the following executives from FirstEnergy: John Chambers, Vice Chairman, President of GMP FirstEnergy; Nicholas Johnson, Vice Chairman, Co-Head, Energy Investment Banking; and Trent Boehm, Vice Chairman, Co-Head, Energy Sales and Trading. Kevin Overstrom, Vice Chairman and member of the Executive Committee, will continue his long and successful tenure at GMP as Co-Head, Energy Investment Banking with Mr. Johnson. Additionally, FirstEnergy Chairman Jim Davidson will become Chairman of GMP FirstEnergy.
Commenting on the closing, Harris Fricker, GMP’s Chief Executive Officer and President, said “We are pleased to welcome FirstEnergy and its energy-focused professionals. With today’s closing, we have filled a void in the Canadian marketplace – we have a highly viable and national independent brokerage with a leading energy franchise. With the introduction of GMP FirstEnergy, we believe, we are optimally positioned to compete, grow and win in the global energy sector and the independent brokerage space. We anticipate considerable synergies resulting from the combination of two strong franchises.”
"The creation of GMP FirstEnergy has received strong support from the Calgary community. We are hitting the ground running and look forward to taking advantage of the expanded opportunities we foresee for clients and investors alike as part of a broader national independent firm,” said John Chambers. “As we bring our capabilities together, GMP FirstEnergy is anticipated to be a disruptive force in the energy sector. We are also pleased that GMP FirstEnergy will continue the FirstEnergy legacy of remaining deeply committed to the communities where we live and work.”
Upon closing, GMP issued 11,161,671 GMP common shares to FirstEnergy shareholders, with the remaining balance of the consideration to be paid to FirstEnergy shareholders in the form of a five-year promissory note. A significant portion of the common shares issued to FirstEnergy shareholders are subject to an escrow agreement and will vest over a four-year period.
Commenting further, Mr. Fricker said, “FirstEnergy is a terrific strategic and cultural fit with GMP’s diversified securities franchise. The energy business is vitally important to the Canadian economy, and we are pleased that GMP FirstEnergy will play a significant role in its development as the sector recovers from current cyclical lows. FirstEnergy is a clear leader in Canadian energy with proven operational expertise and, importantly, has remained profitable through the current energy market trough.”
This press release contains “forward-looking information” as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts, as well as statements regarding FirstEnergy. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.
Forward-looking information is not a guarantee of future performance and is subject to numerous risks and uncertainties, including those described in this press release. The integration of FirstEnergy is subject to various risks and uncertainties. In addition, GMP FirstEnergy's primary business activities are both competitive and subject to various risks. These risks include market, credit, liquidity, operational and legal and regulatory risks and other risk factors including, without limitation: variation in the market value of securities, volatility and liquidity of equity and fixed income trading markets, volume of new financings and mergers and acquisitions, dependence on key personnel and sustainability of fees. Other factors, such as general economic conditions, including volatility in the mining and oil and gas sector and interest rate and exchange rate fluctuations, and focus on relatively few industries may also have an effect on GMP's results of operations. Many of these risks and uncertainties can affect GMP's actual results and could cause its actual results to differ materially from those expressed or implied in any forward-looking information disclosed by management or on its behalf. For a description of additional risks that could cause our actual results to materially differ from our current expectations, see “Risk Management” and "Risk Factors" in the Second Quarter 2016 MD&A and “Risk Factors” in GMP's annual information form. These risks and uncertainties are not the only ones facing GMP together with its consolidated operations controlled by it and its predecessors (GMP Group). Additional risks and uncertainties not currently known to us or that we currently consider immaterial may also impair the operations of the GMP Group. Material assumptions or factors underlying the forward-looking information contained in this press release include, but are not limited to, “Business Environment and Outlook”, “Second Quarter 2016 Financial Highlights”, “Segment Results ”, “Liquidity and Capital Resources” sections of the Second Quarter 2016 MD&A. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. The forward-looking information contained in this press release is made as of the date of this press release, and should not be relied upon as representing GMP's views as of any date subsequent to the date of this press release. Except as required by applicable law, management and GMP's Board of Directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
ABOUT GMP CAPITAL INC.
GMP is a leading independent diversified financial services firm headquartered in Toronto, Canada, providing a wide range of financial products and services to a global client base that includes corporate clients, institutional investors and high-net-worth individuals in two integrated reporting segments. The Capital Markets segment provides investment banking, including advisory and underwriting services, institutional sales and trading and research through offices located in Toronto, Montreal, Calgary, New York, London, Houston, Miami, Dallas, Hong Kong and Beijing. Wealth Management consists of GMP’s non-controlling ownership interest in Richardson GMP Limited. Richardson GMP Limited, Canada’s largest independent wealth management firm, is focused on providing exclusive and comprehensive wealth management and investment services delivered by an experienced team of investment professionals. GMP is listed on the Toronto Stock Exchange under the symbol “GMP”. For further information, please visit our corporate website at gmpcapital.com.
ABOUT GMP FIRSTENERGY
Through its predecessor firms, GMP FirstEnergy traces its energy-focused roots back to 1993. Today, GMP FirstEnergy is an industry leader in the global energy sector providing financial advisory and investment services to a broad range of corporate clients and sophisticated investors worldwide. The firm’s technical expertise and comprehensive understanding of oil and gas assets around the globe allow it to deliver superior advice and execution to clients. GMP FirstEnergy is a trade-name and division of GMP Securities L.P.
For further information please contact:
GMP Capital Inc.
Rocco Colella, Director, Investor Relations
145 King Street West, Suite 300, Toronto, Ontario M5H 1J8
Tel: (416) 941-0894; Fax: (416) 943-6175
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