In early 2023, Canaccord Genuity Group Inc. (TSX: CF) became the subject of a management-led proposal to take the company private. At the time, from this author’s perspective, the bid felt opportunistic and somewhat ham-fisted — arriving in the midst of a capital markets downturn when CF’s valuation was depressed, and offering a modest premium that many felt undervalued the firm’s crown jewel: its wealth management franchise.

The wealth management industry is highly consolidative. Larger players are constantly seeking to expand AUA, client reach, and geographic presence by acquiring smaller to mid-sized firms — which are often more nimble, have loyal client bases, and can be integrated for both cost synergies and immediate revenue accretion. Firms like CF, with significant scale in certain markets but still small enough to be digestible for global players, sit squarely in this strategic sweet spot.

The pushback was fierce. Independent directors resisted, citing valuation and governance concerns. The special committee eventually recommended shareholders reject the bid, and the deal collapsed【1】. But in hindsight, that failed bid may not have been a dead end — it may have been an intentional – Or unintentional stalking horse.

Board Changes and a Softer Blocking Position

Since the failed bid, there have been changes in board composition. Some of the directors most opposed to the MBO resigned, and were replaced by individuals perceived as more management-aligned【1】. This could mean that the firm’s governance guardrails against a renewed insider approach are now less rigid, lowering the barrier to another transaction.

Insider Influence Has Strengthened

Insider ownership has grown from ~42% to ~47%【2】. Part of this increase was funded through $27 million in loans from CF to executives and employees to buy more shares【3】. While insider buying is common, directly financing it from the corporate balance sheet is unusual in Canadian public markets. The effect is twofold:

1. Increased alignment between management and shareholders
2. Consolidated voting power in friendly hands — edging closer to the two-thirds majority required to approve a privatization

The Stalking Horse Effect

In bankruptcy sales, a stalking horse bid sets the minimum price and tests market appetite. While CF’s 2023 MBO was not in a distressed context, it had – deliberately or accidentally -the same strategic impact:

• Signaled management’s floor value for the company
• Tested shareholder resistance
• Created a reference price for any future bidder — insider or strategic

The RFG Acquisition as a Benchmark

In July 2025, iA Financial announced the acquisition of RF Capital Group (RFG) for ~C$565M EV, valuing it at ~1.34% of its $42.3B AUA【4】. By contrast, CF’s wealth management arm has $125.3B in AUA【5】, with broader geographic reach (Canada, UK, Australia) and greater scale.

Important distinction: RFG’s 1.34% is a whole-company EV/AUA multiple. For context, wealth management transactions in the UK market have historically commanded higher percentages of AUA — in the range of ~2% — due to stronger recurring revenues, larger client sizes, and higher margins. This higher multiple applies to select divisions in certain geographies, not to CF’s entire global AUA.

Table 1 – EV/AUA Comparison

Metric	RF Capital (RFG)	Canaccord Genuity (CF)	CF at RFG Multiple
AUA (C$B)	42.3	125.3	—
EV / AUA Multiple	1.34%	~0.75%	1.34%
EV (C$M)	565	~940	1,680
Shares O/S (M)	—	101.2	—
Implied Share Price	—	C$9.30	C$16.60

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EBITDA Comparison: CF vs. RFG and Industry Benchmarks

While AUA multiples are a common shorthand in wealth management M&A, EBITDA-based valuations can be even more telling, since they capture profitability and efficiency, not just scale. Here, the gap between CF and both RFG’s acquisition and industry averages is even more pronounced.

Metric	RF Capital (RFG)	Canaccord Genuity (CF)	Industry Benchmark*
FY EBITDA (C$M)	~90**	~310【2】	25–30% margin typical in wealth management
EBITDA Margin (%)	~21%	~24%【2】【5】	20–35%
EV / EBITDA Multiple	~6.3x	~3.0x	6–10x

*Typical for mid-to-large wealth management firms based on North American and UK precedent transactions
**Estimate derived from deal disclosures and iA Financial filings

Key takeaway: CF produces more than 3x the EBITDA of RFG yet trades at less than half the EV/EBITDA multiple typical for its sector. This deep valuation discount — on both AUA and earnings — underscores the upside if market perception shifts or a buyer steps in.

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Table 2 – 2023 MBO Price vs. Current vs. RFG-Implied

Scenario	Price/Share	Premium to Current
2023 MBO Offer	C$11.25*	+21%
Current Price (Aug 2025)	C$9.30	—
RFG-Implied Value	C$16.60	+78%

*Approximate based on public disclosure.

Table 3 – SOTP Illustration Using UK Wealth Premium

(Note: This uses ~2% of AUA only for CF’s UK Wealth division — a figure drawn from the TD Securities analyst report dated June 2025【3】, reflecting higher precedent transaction multiples in that market. This is not a firm-wide multiple.)

Component	Value per CF Share
UK Wealth – valued at ~2.0% of AUA, less net debt/HPS	~C$6.00
Rest of Business (Canada WM + Capital Markets)	~C$4.00–$5.00
SOTP Range	C$10.00–$11.00

Table 4 – EV/AUA Sensitivity Analysis

(Note: These multiples are applied to CF’s total AUA and are distinct from the ~2% AUA multiple used for the UK Wealth division.)

EV/AUA Multiple	EV (C$B)	Price/Share
0.75% (Current)	0.94	C$9.30
1.00%	1.25	C$12.40
1.20%	1.50	C$14.90
1.34% (RFG Deal)	1.68	C$16.60
1.50%	1.88	C$18.60

Regulatory Overhang: A Persistent Drag

An ongoing U.S. regulatory investigation tied to CF’s capital markets operations remains unresolved, and management has acknowledged it as a notable overhang【2】. The company’s sale of its U.S. wholesale market-making business to Cantor in early 2025 removed some operational exposure, but professional fees and legal costs continue to weigh on profitability.

Risk Factor	Impact on CF
Potential fines or settlements	Could result in one-time charges
Ongoing professional fees	Erodes near-term earnings
Business model shift	Exits a low-margin U.S. business, reduces risk

Table 5 – Historical EV/AUA Multiples (%)

Year	CF	Sector Median
2021	1.20	1.35
2022	1.10	1.30
2023	0.85	1.20
2024	0.78	1.15
2025	0.75	1.10

So…….The Investment Case is?

• Floor — 2023 MBO set a psychological baseline, albeit at a time the author viewed as opportunistic
• Upside — Sector M&A multiples (RFG) imply a 70%+ re-rate potential
• Catalysts — UK Wealth monetization, capital markets rebound, renewed buyout bid
• Insider Positioning — Higher ownership, unusual insider financing, and a friendlier board increase deal feasibility
• Overhang — U.S. regulatory matter still unresolved, but resolution could be a catalyst
• Historical Undervaluation — The gap between CF’s EV/AUA multiple and the sector median is at its widest in five years
• Industry Tailwind — The wealth management sector is highly consolidative, and CF’s profile — large enough to be meaningful but still small enough to be digestible — makes it a natural target for larger strategic buyers seeking scale, new client bases, and cross-border expansion.

Bottom line:
If the 2023 bid was the stalking horse, the setup today is far more favourable for a second run — whether from management or a strategic buyer — and the valuation gap to precedent transactions remains wide.

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References

1. Canaccord board to shareholders: reject management buyout, Investment Executive
2. Raymond James Analyst Report Update – August 8, 2025. Internal equity research update on Canaccord Genuity Group Inc., discussing Q1/F26 results, insider ownership changes, and ongoing U.S. regulatory overhang.
3. TD Securities Analyst Report – June 2025. Internal equity research covering Canaccord Genuity Group Inc., including sum-of-the-parts valuation methodology, UK Wealth AUA premium assumption (~2%), and target price range.
4. iA Financial Corporation to acquire RF Capital Group Inc.
5. Canaccord Genuity Group Inc. Reports First Quarter Fiscal 2026 Results