GMP Capital Inc. entered into a deal with Richardson Financial Group Ltd. to acquire all remaining Richardson GMP Ltd. common shares it does not own, based on an enterprise value of C$420 million for Richardson GMP.

GMP Capital in February said it entered into a nonbinding term sheet to consolidate its ownership of Richardson GMP. The negotiation period was later extended due to the COVID-19 pandemic.

Under the terms of the deal, GMP Capital will issue 1.875 common shares per Richardson GMP common share. Other deal terms include a special dividend of 15 Canadian cents per share to GMP Capital shareholders prior to the deal closing.

In a separate news release, Richardson Financial said it will receive 54,880,719 common shares in the capital of GMP Capital at a deemed issue price of about C$2.27 per GMP Capital common share, representing a notional value of about C$124.6 million. The company expects to own about 40% of GMP Capital shares upon completion of the deal, inclusive of its current interest in GMP Capital.

GMP Capital said in its own news release that other company shareholders and Richardson GMP investment advisers will own 31.4% and 28.5%, respectively, of the company's shares following the deal completion.

GMP Capital shareholders will be asked to approve a name change of the company, while Richardson GMP also plans to change its name.

Sandy Riley, CEO of Richardson Financial, and Marc Dalpe, the investment adviser representative on Richardson GMP's board, will join GMP Capital's board, conditional on the closing of the deal. The transaction is expected to close in the fourth quarter.

RBC Capital Markets provided a fairness opinion to the special committee of GMP Capital's board, while Cormark Securities Inc. was Richardson Financial's financial adviser.