TORONTO (Reuters) - Canadian fund manager Sprott Inc SII.TO has agreed to acquire two small Calgary-based resource investment firms for C$14 million in cash and stock as the Bay Street precious metals bull taps Western Canadian interests.
Toronto-based Sprott, founded by Bay Street contrarian investor Eric Sprott and taken public in 2008, said it signed a letter of intent to buy investment companies Toscana Capital Corporation and Toscana Energy Corporation.
Sprott is one of Canada’s most aggressive gold and silver investors and is in an expansion push at home and abroad that started with the acquisition of Global Resource Investments, Terra Resource Investment Management and Resource Capital Investments in September 2010.
“In the Toscana Companies, we are acquiring a leading team of energy specialists and lenders as well as a Calgary presence,” said Sprott Chief Executive Peter Grosskopf. “We believe that each of Toscana’s energy lending business, managed working interest portfolio and flow through investment vehicles have significant growth potential.”
The Toscana companies have aggregate assets of some C$161 million ($162 million) and focus on financing and investing in public and private oil and gas companies as well as drilling projects.
Under the terms of the deal, the companies could earn an additional C$5.25 million in common shares of Sprott over three years upon attaining certain financial performance hurdles.
($1 = 0.99 Canadian dollars)
Reporting By Pav Jordan; editing by Janet Guttsman