Amid tough markets for many boutique investment dealers, recently created Edgecrest Capital Corp. is buying independent rival Stonecap Securities Inc.
The Toronto-based firms announced a definitive agreement Monday that will see Stonecap, and its U.S. subsidiary, SCS (USA) Inc., acquired by Edgecrest Capital. The price for the deal was not disclosed.
Edgecrest was launched in mid-2013, led by industry veteran, David Beatty, as chairman and CEO. It aims to rank as a top three independent Canadian investment dealer within its first five years, it says. Approximately 10 professionals will join the firm from Stonecap, which was created out of the institutional division of Blackmont Capital in 2010.
The transaction is expected to close by Feb. 18, subject to regulatory approval. Assuming that the deal is approved, Stonecap will be amalgamated into Edgecrest and SCS (USA) Inc. will be rebranded with the Edgecrest name in the U.S.
“In what has been a difficult environment for all independent dealers, the acquisition of Stonecap by Edgecrest is a great outcome for all Stonecap stakeholders including its clients, employees and shareholders,” ” said Jeffrey White, president and CEO of Stonecap.
“Stonecap clients will benefit from Edgecrest’s exceptional investment banking expertise and its robust transaction pipeline, together with an enhanced distribution capabilities and a more targeted, idea-focused approach to research. For Edgecrest, the acquisition of Stonecap will meaningfully accelerate its growth, expand its client relationships, and give it additional diversification into more industry verticals,” he added.