TORONTO (Reuters) - TMX Group Ltd (X.TO) said on Tuesday it has sold its investor relations and financial communications arm Equicom to National Public Relations, marking the first decisive move by the stock exchange operator since completing a strategic review.
National said existing Equicom clients should see no disruption, while TMX said the sale fits into its refreshed strategy of focusing on core products and services.
“It allows us to sharpen our focus,” said Ungad Chadda, senior vice president for TMX’s Toronto Stock Exchange.
Financial terms were not disclosed but Chadda said it was not material for TMX. Proceeds will likely be booked in the third quarter. TMX will report second-quarter results on Aug. 5.
TMX hosts many resource-based issuers and has struggled to offset the impact of slumping commodity prices on capital-raising and listings, but Chadda said the outlook has improved.
“I can’t remember a time in recent years where we had so many IPO (initial public offerings) files both live, ongoing, filing preliminary prospectuses, and in terms of pipeline,” Chadda said. “There seems to be an investor appetite in rotating into sectors relating to innovation.”
Toronto-based TMX, which also operates the TSX Venture Exchange and a derivatives exchange in Montreal, in June completed a six-month strategic review launched two months after Lou Eccleston joined the company as chief executive officer.
The review said key pillars of the strategy included a focus on capital formation, derivatives and market insights and plans to be “a technology-driven solutions provider.”
In a separate statement, Res Publica-owned National said the Equicom business, which works with more than 120 public companies listed in Canada and elsewhere, will be led by Ronald Alepian.
Editing by Nick Zieminski