Australia’s Macquarie Group is acquiring Toronto-based Orion Financial Inc. to give it a bigger stake in the Canadian market.

The $147 million price tag is to be paid in a combination of cash and shares; with $30 million to be paid to the vendors in cash upon financial close; and 1.6595 million exchangeable shares that will be held in escrow and released over a five year period.
Orion’s senior management team will remain with the business. Paul Donnelly, currently an executive director in Macquarie’s Investment Banking Group in Australia, will relocate to Toronto to lead the combined businesses.

Following a transition period, the business will be re-branded and operate under the name Macquarie Capital Markets Canada Ltd. with employees of Orion becoming employees of Macquarie. Retention agreements will also be entered into with key Orion employees.

Macquarie said that, when combined with its existing Canadian investment banking businesses, the acquisition of Orion’s advisory, equity research, sales and trading platform will create a leading investment banking and securities franchise.

Orion focuses primarily on the resources sector, with expertise in the technology, healthcare/biotechnology and diversifieds sectors. Its primary activities include M&A advisory, equity underwriting, equity research, sales and trading. it employs approximately 130 people based predominantly in Toronto, with additional offices in Calgary and Montreal.

Nicholas Moore, global head of Macquarie’s investment banking group, said, “Our objectives in acquiring Orion are firstly, to round out our global resources investment banking business and secondly, to extract maximum advantage from combining their successful Canadian operations in equity underwriting, sales, trading and research with the scale and global reach of Macquarie Securities.

“With Orion joining Macquarie, we see significant opportunities for the combined Canadian team to better access Macquarie’s global pool of investment banking products, executives and systems to provide clients with a wider range of services in Canada and elsewhere. Over time, we expect that the combined Canadian business will expand its product offering to complement our existing activities in infrastructure, utilities and resources,” added Moore.