TMX to acquire Canada’s AST from Pacific Equity Partners

TMX Group has agreed to acquire AST Investor Services (Canada) and its affiliate AST Trust Company (Canada), a Toronto-based provider of transfer agency, corporate trust and related services.

TMX Group has agreed to acquire AST Investor Services (Canada) and its affiliate AST Trust Company (Canada), a Toronto-based provider of transfer agency, corporate trust and related services to domestic public and private companies. The deal, valued at C$165 million, is expected to close within 6 to 12 months. The seller is Armor Holdco, a portfolio company of Pacific Equity Partners. TMX is the operator of the Toronto Stock Exchange and other exchanges.


TMX Group Announces Agreement to Acquire AST Trust Company (Canada)

Canada’s premier exchange group to expand its presence in the Transfer Agency and Corporate Trust business

TORONTO, Sept. 25, 2020 /CNW/ – TMX Group Limited (TMX Group) today announced it has entered into an agreement to acquire AST Investor Services Inc. (Canada), and its subsidiary AST Trust Company (Canada), a leading provider of transfer agency, corporate trust and related services to Canadian public and private companies from a subsidiary of Armor Holdco, Inc. (Armor), a portfolio company of Pacific Equity Partners (PEP), for $165 million in total consideration, which includes $30 million of cash for regulatory and non-regulatory purposes, subject to customary closing conditions and working capital adjustments.

“The acquisition of AST Trust Company (Canada) will significantly strengthen TMX’s ability to serve the needs of companies across the marketplace by bringing to our TSX Trust business a proven team of industry professionals, and a wider range of products and technology capabilities,” said John McKenzie, Chief Executive Officer, TMX Group. “From a strategic perspective, this transaction will help to accelerate TSX Trust’s growth and enhance its competitive position, deepening relationships with existing clients and broadening the scope and scale of its service offerings.”

AST Investor Services Inc. (Canada) and AST Trust Company (Canada) offer a comprehensive portfolio of products and services, currently including transfer agency services, equity plan solutions, corporate trust, structured finance and proxy related services. AST Investor Services Inc. (Canada) and AST Trust Company (Canada) have approximately 150 employees in offices in Toronto, Montreal, Calgary and Vancouver. Armor’s U.S. operations, including American Stock Transfer & Trust Company, LLC and D.F. King & Co., Inc., are not a part of this transaction.

“I am very confident that the Canadian business will continue its record of success going forward under TMX ownership,” said Marty Flanigan, Chairman of AST Trust Company (Canada) and President and CEO of Armor. “This transaction provides scale and creates value for our clients, partners and employees.”

“We are excited to see the business transition into the hands of a respected Canadian financial institution, and we look forward to seeing the business grow under TMX’s direction,” said Alex Ovchar, Associate Director at PEP and AST Trust Company (Canada) Board Member.

Summary details:

AST Trust Company (Canada)’s last twelve months (LTM) unaudited revenue through June 30, 2020 was $46.5 million (including $8.0 million of margin income) and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)1 was $11.6 million, excluding indirect corporate allocations from the parent company.2
Over 50%² recurring revenue for the year ended June 30, 2020.
The transaction is expected to have a positive impact on TMX Group’s adjusted earnings per share (EPS)¹ (excluding amortization of acquired intangibles and integration costs) in the first full year of ownership, before expected synergies.
We expect to realize combined revenue and technology cost synergies of approximately $8.0 million over the first two years, following acquisition.3
The transaction is expected to be financed with a combination of cash and debt capacity.
The transaction is expected to close within 6 to 12 months, subject to receipt of regulatory approvals under the Competition Act (Canada) and Trust and Loan Companies Act (Canada).

National Bank Financial Inc. is acting as the exclusive financial advisor to TMX Group on the transaction. Torys LLP is acting as the legal advisor.

Macquarie Capital is acting as financial advisor and Blake, Cassels & Graydon LLP (Blakes) is acting as legal advisor to AST Trust Company (Canada) on the transaction.

About TMX Group (TSX:X)

TMX Group operates global markets, and builds digital communities and analytic solutions that facilitate the funding, growth and success of businesses, traders and investors. TMX Group’s key operations include Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange, The Canadian Depository for Securities, Montréal Exchange, Canadian Derivatives Clearing Corporation, and Trayport which provide listing markets, trading markets, clearing facilities, depository services, technology solutions, data products and other services to the global financial community. TMX Group is headquartered in Toronto and operates offices across North America (Montréal, Calgary, Vancouver and New York), as well as in key international markets including London and Singapore. For more information about TMX Group, visit our website at Follow TMX Group on Twitter: @TMXGroup.

For further information: Shane Quinn, Head of Communications and Public Affairs, TMX Group, 416-947-4609,; Paul Malcolmson, Managing Director, Investor Relations, TMX Group, 647-297-8924,