By James Langton

(November 7 – 10:25 ET) – TD Bank has agreed to acquire institutional boutique Newcrest Capital Inc. for $224 million in cash and stock.

TD says the deal will combine Newcrest’s strength as an investment banking and institutional equities firm, with the global capabilities of TD Securities.

About 75% of the purchase amount is expected to be paid stock with the remainder in cash. There is also a retention plan in place through the deferral of a portion of the purchase price.

TD says it expects the deal to be immediately accretive to cash earnings, there will also be approximately $160 million of goodwill that will be amortized on a straight-line basis over a period of 10 years. Revenue enhancements and expense savings are expected as a result of the transaction. The effective date of the transaction is October 31l and closing will occur upon receipt of all regulatory approvals.

TDSI and Newcrest will start to serve clients on an integrated basis starting immediately under the name TD Newcrest, and with a view to proceeding with full integration once approvals are received. To ensure seamless transition in client service and coverage and to minimize disruptions, TDSI and Newcrest have developed a detailed integration plan.

Although it has yet to determine how many job losses will result, TD notes that redundancies will exist in the areas of investment banking, institutional equities, and support functions. “Total staff requirements will be determined over the next few weeks.”

Newcrest was established by a small group of top-notch Bay Streeters just a couple of years ago to escape from the bank-owned brokerage system. Bob Dorrance, Newcrest’s current CEO will head up the institutional equities group to be marketed under the name TD Newcrest, and will join TDSI’s senior management team as a vice chairman. Andrea Rosen will lead the integration efforts as a vice chairwoman of TDSI. Mike Mueller, also vice chairmain of TDSI, will continue as head of investment banking.

“We are very pleased to be joining forces with TD Securities”, said Bob Dorrance. “Combining our people, our expertise and our entrepreneurial approach as a boutique dealer with the existing integrated financial, advisory and distribution clout of TD, is bound to be a winning combination.”

“I am delighted to announce our acquisition of Newcrest,” said Charlie Baillie, chairman and CEO of TD Bank. “Through this acquisition, we will capitalize on the strengths of both firms and build an even stronger competitive platform from which to enhance shareholder value.”

Don Wright, chairman and CEO of TDSI said, “It’s an excellent strategic fit that provides TD Securities with a solid base for further expansion in the U.S. and in other global markets.”