Raymond James To Expand In Canada With 3Macs Acquisition

Raymond James Financial, Inc.’s (NYSE:RJF) Canadian unit, Raymond James Ltd., inked a deal to acquire MacDougall, MacDougall & MacTier Inc. (also known as 3Macs), an independent Canadian investment firm. 3Macs was founded prior to Confederation in 1849.

The amount of the transaction was not disclosed by the company. However, per a Bloomberg report, the transaction is valued at less than C$100 million, according to a person familiar with the deal.

The acquisition will create Canada's largest independent investment dealer with C$33 billion ($25 billion) in client assets under administration. The transaction is subject to customary approvals, including regulatory and shareholder approval, and is expected to close in the fall of 2016.

Raymond James has been operating in Canada since Jan 2001. The company employs a total of 6,700 financial advisors worldwide, including 370 investment and portfolio managers in Canada. The acquisition of 3Macs will add 72 advisors managing about C$6 billion of client assets under administration for individual investors and families in Canada.

"We are very excited about this new partnership with 3Macs and the opportunity to create a new legacy of excellence serving Canadians and Quebeckers with their total wealth management needs," said Paul Allison, Chairman and Chief Executive Officer (“CEO”) of Raymond James Ltd.

"Not only will this acquisition significantly accelerate our growth strategy across Canada and Quebec, it meets our highly selective parameters for cultural fit, growth in a strategically important marketplace, and ease of integration,” Allison added.

Historically, Raymond James has always been successful in retaining advisors of its acquired firms. This time too, we believe that the company will do the same. Also, the company has been aggressive in recruiting advisors from large brokerage firms including Morgan Stanley (NYSE:MS) and Bank of America Corp.’s (NYSE:BAC) Merrill Lynch.

Key members of 3Macs' management team will remain under the leadership of its president and CEO, Randy Ambrosie, who will report to Allison. 3Macs will continue to operate as a separate division.

3Macs advisors and clients will benefit from access to Raymond James' world class wealth management expertise. Also, 3Macs’ advisors will have access to Raymond James' equity research coverage on more than 1,300 firms across the globe.

“The opportunity to continue our legacy at 3Macs was an important part of our decision to join Raymond James,” Ambrosie said in a joint announcement.

Raymond James’ prospects through strategic acquisitions have flourished under its CEO, Paul Reilly. In Dec 2015, the company announced a deal to acquire U.S. Private Client Services unit of Deutsche Asset & Wealth Management, which is a corporate division of Deutsche Bank AG (NYSE:DB) .

Currently, Raymond James holds a Zacks Rank #2 (Buy).


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