GMP Capital has completed the acquisition of FirstEnergy Capital Corp, creating a franchise in the global energy and Canadian independent brokerage spaces.
GMP has 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 has added 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 tenure at GMP as co-head, energy investment banking with Johnson.
FirstEnergy chairman Jim Davidson will become chairman of GMP FirstEnergy.
Harris Fricker (pictured), GMP's chief executive officer and president, says: "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," says 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.
Fricker says: "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."