Oppenheimer buys major portion of CIBC World Markets' U.S. capital markets businesses

By Angela McDaniels

Tacoma, Wash., Jan. 14 - Oppenheimer Holdings Inc. announced on Monday that its acquisition of a major part of CIBC World Markets' U.S. capital markets businesses, including a related Israeli investment banking and equities business, has been completed.

The closing of the acquisition of related operations in Asia and the United Kingdom is expected to close at a later time, according to an Oppenheimer news release.

The businesses acquired include CIBC World Markets' U.S. investment banking, corporate syndicate, institutional sales and trading, equity research and options trading businesses and a portion of the debt capital markets business, which includes convertible bond trading, loan syndication, high-yield origination and trading as well as related overseas operations.

Annualized revenue of these businesses, based on CIBC's most recently published results for the year ended Oct. 31, is more than $400 million, the release stated.

"Our firm is now positioned to service clients with a complete offering of capital markets services, including M&A advisory, equity underwriting, high-yield fixed income origination and loan syndication. We are confident in the potential of this platform and are confident that it will be a success," Oppenheimer chairman Albert G. Lowenthal said in the release.

Plans for the acquisition were first announced in November.

As previously reported, the purchase price is made up of an earn-out based on the combined annual performance of Oppenheimer & Co. Inc.'s capital markets division and the acquired businesses for 2008 through 2012, which will be at least $5 million per year, to be paid in the first quarter of 2013, plus warrants to purchase 1 million class A non-voting shares at $48.63 per share, exercisable for five years, and a cash consideration equal to the book value of certain fixed assets being acquired.

Oppenheimer is a Toronto-based provider of financial services.

CIBC World Markets is the wholesale and corporate banking arm of Toronto-based Canadian Imperial Bank of Commerce.

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