Wellington West to go public

Wellington West Capital is planning to make a public offering for about 20% of the company to help fuel its growth on both sides of the border. Charlie Spiring, CEO of the Winnipeg-based brokerage, has confirmed its board has asked management to get the company ready for an IPO in approximately two years.

Wellington West is already one of the fastest-growing financial services firms in Canada, with 28 offices, 98 advisors, and $7.4 billion in assets under administration. Spiring says his goal by the end of 2008 is to double the assets, open another 10 to 12 offices, and add another 75 to 80 brokers.

“We want to be the biggest non-bank player in Canada. In the U.S., we will be opportunists and niche players,” he says.

Spiring says in addition to continuing to grow organically and through recruiting top-producing brokers from other firms, he’d like to make some acquisitions to kick-start Wellington West’s growth. He says he has already had preliminary discussions with a number of potential acquisition targets in Canada and the U.S.

Just what kind of public vehicle Wellington West will ride on to Bay Street remains to be seen. Spiring says he has no problem going the income trust route if the market is paying a “big premium” for trusts versus standard corporations.

Spiring notes that only a select few “mega-sized” companies in Canada and the U.S. remain privately held. Some, such as Canaccord Capital, have become much stronger since going public, he observes. “Their brand is better recognized, people have joined them and they have a touch more credibility than before. Some of the brightest minds in Canada who direct money are now their shareholders. [Going public] has helped make them a better organization and now they’re truly transparent. It’s easy to knock a private firm because they don’t have public numbers.”

However, it will be some time before the company sets a specific IPO date.” We have to make sure the growth has been achieved, the execution has happened, and the market conditions are appropriate. We need all those stars to line up before we pick a date,” Spiring says.

The board has determined 35 different tasks needed to be finalized before the IPO can become a reality. They include repatriating its 9% ownership stake from Crocus Investment Fund (which was completed last month for between $5 million and $10 million), closing its early-October acquisition of Toronto-based Clearsight Wealth Management, and creating a board that is Toronto Stock Exchange-compliant.

The CEO says it’s far too early to speculate how much 20% of Wellington West might fetch on the open market, but he’s optimistic it would be in the same ballpark as the Gluskin Sheff & Associates IPO earlier this year. The Toronto-based company raised $133 million when it sold off one-quarter of the firm. “We’d be very happy with a multiple similar to what Gluskin got.”

Renée Alexander is a Winnipeg-based freelance writer

(10/19/06)