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Perth-based financial services company Euroz Hartleys Group (ASX: EZL) has struck a binding agreement to sell its Capital Markets business to Canadian financial services group BMO Financial Group for $145 million in a cash deal that will transform the firm into a standalone ASX-listed private wealth operation.
The transaction will see BMO, which is listed on the Toronto and New York stock exchanges with more than US$1.5 trillion in total assets, absorb Euroz Hartleys' institutional equities, corporate finance and fixed income divisions as it pushes deeper into the Australian metals and mining sector.
The sale was confirmed by Euroz Hartleys earlier this month following media reports that leaked details of the discussions with BMO.
“Following a disciplined negotiation process, the board is pleased to have reached an outcome that delivers significant and certain value to our shareholders," says Andrew McKenzie, the executive chairman of Euroz Hartleys, following today's formal announcement.
"The $145 million headline consideration is a reflection of the quality of our Capital Markets staff and their relationships.
"Importantly, the strategic alliance with BMO ensures that our Private Wealth and Capital Markets clients will continue to benefit from the deep connectivity between the two businesses that has always been a major strength and point of difference in our client offering.
"We are confident that BMO is the best possible long-term partner for our Capital Markets business and will add value to the quality of our Private Wealth client offering.
"This innovative transaction builds on our excellent track record of proven capital stewardship and payment of over $421 million of dividends and capital to shareholders in our 26 year history.”
Completion is anticipated in the fourth quarter of calendar year 2026, subject to regulatory and shareholder approvals.
Euroz Hartleys intends to return all post-tax net proceeds to shareholders through a combination of a fully franked dividend and a capital return, subject to shareholder approval and an Australian Taxation Office class ruling.
Directors holding about 10.65 per cent of shares on issue intend to vote in favour of the transaction.
McKenzie led negotiations with BDO alongside managing director Tim Bunney under an independent board committee's oversight.
Both are expected to join BMO's Capital Markets business upon completion but will remain as non-executive directors of Euroz Hartleys in the short-to-medium term.
The company has begun a search for a new chief executive to lead the remaining Private Wealth business, which manages about $5 billion in funds under management across around 60 advisers.
BMO's head of global investment and corporate banking, Carrie Cook, says the acquisition represents "a defining step forward" in the group's global metals and mining leadership, adding Australian market capability to a platform that already spans North America, Europe and the United Kingdom.
"By combining our global distribution capabilities with deep local expertise in Australia, we are building a more connected platform that will enable clients to access capital and opportunities across markets," says Cook.
"As capital formation continues to shift globally, our clients increasingly expect seamless access to investors and opportunities across markets - and this transaction supports our ambition to be ahead of that evolution.”
Euroz Hartleys is expecting FY26 group revenue of $140 million to $142 million and net profit after tax of $15 million to $16 million, which includes $4 million to $5 million in one-off transaction-related costs.
The guidance follows a strong first half in which the group posted revenue of $76.7 million and NPAT of $13.84 million, up 121 per cent on the prior corresponding period.
Shares in Euroz Hartleys closed 8 per cent higher at $1.35.
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