Despite all the recent interest in Wellington West Capital Inc. as an acquisition target, Charlie Spiring knows he’s in the driver’s seat.

That’s because the chairman and CEO of the Winnipeg-based financial services firm has two rules for potential partners: they have to give him a “bag of gold”; and they have to let him run the new company.

“We get suitors chasing us all the time,” Spiring says. “We say, ‘Thank you, a bag of gold does interest us.’ We’ll talk about things, but it has to be a merger of equals — and you have to give me control in running it. You have to kiss a lot of frogs to get what you want.

“We want to control our own destiny,” he adds. “Most people think we’re a bunch of bumpkins because we’re out of Winnipeg. All we do is make money, and we keep doing everything right.”

Although there has been a shortage of profitable firms in Canada’s investment industry recently, Spiring says Wellington West has been swimming upstream for the past seven years with more than $100 million in profits. The company has four primary divisions: retail brokerage, financial planning, capital markets and asset management.

“This year, we’re going to make close to $30 million [in profit],” Spiring says. “Most independents aren’t making money. They’re just distribution or they’re just manufacturing. We’ve figured out the magic formula for making money.”

National Bank of Canada, which owns 17% of Wellington West, has made no bones about its aspirations to become a truly national player, which would entail a significant expansion beyond its base in Quebec — particularly on the wealth-management side. Wellington West has about $10 billion in assets under administration vs almost $250 billion in AUA for National Bank.

A flurry of speculation about detailed talks between the two companies was touched off by comments made at National Bank’s recent annual shareholders’ meeting in Montreal regarding its aspirations in English Canada. A spokesman for National Bank declined to comment on the company’s plans.

Also fanning the flames was Wellington West’s decision to sell its Toronto-based Clearsight Investment Program division to Accretive 360 Inc. for $1 million-$2 million. The Clearsight affinity program, which has more than 20 university alumni associations as partners, has a combined alumni base of more than two million investors. Michael Burns, Clearsight’s president, who has overseen its growth, will move over to Accretive as executive vice president of business development and public affairs as part of the deal.@page_break@Spiring says Clearsight was worth far more to Accretive than it was to Wellington West: “It was more of a distraction to us. We had been selling it for eight months but, when people heard lawyers were working on the deal, people got excited and said there was a deal [for Wellington West] right away.”

Dan Richards, CEO of Client-insights in Toronto, says National Bank has had some success with organic growth but, if it wants immediate success, it has to go the acquisition route. He says there are a limited number of alternatives on the market: Wellington West, Toronto-based Richardson GMP Ltd. , Toronto-based Ray-mond James Ltd. , Vancouver-based Canaccord Financial Ltd. and Toronto-based Macquarie Private Wealth Inc.

“It’s no surprise that there is speculation about the potential of a transaction between National Bank and Wellington West,” Richards says. “It’s consistent with National Bank‘s strategy to want to expand its presence in English Canada in a meaningful way. One of the virtues of being privately owned is you can say no to an offer. Whether it makes sense or not depends on the shareholders’ point of view.”

National Bank bought a 12.5% stake in Wellington West in the autumn of 2008 for $35.8 million, at $54.40 a share. As part of the deal, National Bank had the right to acquire up to an additional 5% of Wellington West’s shares when existing shareholders sold their holdings from time to time. Since then, the bank has increased its stake to 17%.

Spiring says that at 54 years old, he’s not ready to retire and concedes that he’d get bored without a company to run: “I have lots of runway left. My goal is to be the biggest in my space when I get put out to pasture.”

Wellington West has plenty of options for its shareholders. Spiring says an initial public offering, first talked about more than four years ago, is still on the table. Or the company could even look at taking on a significant shareholder, such as National Bank, to give it the financial wherewithal to make a major acquisition of its own.

“There’s nothing wrong with having two sophisticated partners,” Spiring says. “We have a couple of offers out on the Street; but, every day, the market gets better, the bid-ask widens and [the targets] get more excited about their prospects. I need a good, old-fashioned correction.”

Spiring says social issues are very important for him when it comes to possible acquisition or merger partners. That’s why he doesn’t want to sell Wellington West to see its acquirer strip its head office in search of synergies.

“We’re a high-touch firm,” he says. “We’re close to our brokers. We know their birthdays and their kids. It’s our secret sauce.” IE