Australian and Hong Kong operations renamed ‘Canaccord BGF’

TORONTO, Nov. 2, 2011 /PRNewswire/ – Canaccord Financial Inc. (“Canaccord”,
TSX: CF, AIM: CF.) is pleased to announce the completion of its
previously-announced acquisition of 50% of BGF Capital Group Pty Ltd.
(commonly known as BGF Equities), a growing independent investment
dealer with operations in Australia and Hong Kong. The business will
be rebranded Canaccord BGF, effective immediately.

“We are pleased to welcome Canaccord BGF to our global platform,” noted
Paul Reynolds, President and CEO of Canaccord. “Our new partners in
Australia and Hong Kong mark our continued strategy to grow our global
presence and better service our clients.”

“We are entering a new and exciting phase of growth as Canaccord BGF,”
said Marcus Freeman, Managing Director & CEO, Canaccord BGF. “Through
this partnership, we are well positioned to provide our clients with a
global research perspective and significantly enhanced distribution
capabilities.”

The aggregate consideration paid by Canaccord for the 50% interest
in BGF Equities totalled AUD$40.3 million. The 50% interest was
acquired through the purchase of shares from certain existing
shareholders and the subscription of treasury shares, for the following
consideration:

• AUD$14.7 million for the purchase of existing BGF Equities shares,
  primarily from passive non-executive shareholders
• AUD$20.0 million for the subscription of new equity in Canaccord BGF
• AUD$5.6 million in Canaccord common shares (the “Consideration Shares”),
  issued to key executives of Canaccord BGF

A total of 623,796 Consideration Shares were issued, calculated on the
basis of Canaccord’s volume-weighted average trading price on the
Toronto Stock Exchange for the 20 consecutive trading day period ending
on the third trading day before closing. Using this method of
valuation, the shares were valued at AUD$5.3 million. The
Consideration Shares are held in escrow and will be released rateably
over five years. Following the issuance of these common shares,
Canaccord will have 83,945,492 common shares in issue.

Canaccord intends to purchase for cancellation 623,796 common shares
from the market, pursuant to its normal course issuer bid. As a
result, subject to the completion of this share buyback, the issuance
of the Consideration Shares should not be considered dilutive to
current Canaccord shareholders.

All required regulatory and stock exchange approvals have been received
for the transaction and, as such, Canaccord BGF will commence
operations immediately.

In connection with this partnership, Canaccord is pleased to appoint the
following three additional directors to the Canaccord BGF board of
directors:

• Paul Reynolds, President and CEO of Canaccord Financial Inc.,
• Brad Kotush, EVP and Chief Financial Officer of Canaccord Financial
  Inc., and,
• Terry Lyons, Lead Independent Director of Canaccord Financial Inc.

They join existing executive board members Warwick Grigor, Marcus
Freeman and David Barlow.

Canaccord has been granted the option to purchase from the existing
shareholders the remaining 50% equity interest in Canaccord BGF. This
option will be exercisable, at Canaccord’s sole option, for a
three-month period commencing on the fifth anniversary of closing, at a
price to be determined at such time by reference to Canaccord BGF’s
profits.

ABOUT CANACCORD FINANCIAL INC.:

Through its principal subsidiaries, Canaccord Financial Inc. is a
leading independent, full-service financial services firm, with
operations in two principal segments of the securities industry: wealth
management and global capital markets. Since its establishment in 1950,
Canaccord has been driven by an unwavering commitment to building
lasting client relationships. We achieve this by generating value for
our individual, institutional and corporate clients through
comprehensive investment solutions, brokerage services and investment
banking services. Canaccord has 49 offices worldwide, including 32
Wealth Management offices located across Canada. Canaccord Genuity, the
international capital markets division, operates in Canada, the U.S.,
the U.K., China, Hong Kong, Australia and Barbados.

Canaccord Financial Inc. is publicly traded under the symbol CF on the
TSX and the symbol CF. on AIM, a market operated by the London Stock
Exchange. Canaccord’s Series A Preferred Shares are listed on the TSX
under the symbol CF.PR.A.

ABOUT CANACCORD BGF:

Canaccord BGF is an Australian-based, securities advisory firm with
offices in Melbourne, Sydney and Hong Kong. The company provides
investment banking, sales & trading, research and wealth management
services to clients in Australia, Asia and the UK. Canaccord BGF’s
expertise and services are focused on emerging companies and it has
developed a proven track record of identifying high conviction
investment opportunities across the metals, mining, energy and
industrials sectors.

Canaccord BGF is part of Canaccord Financial Inc.’s group of companies
and operates closely with the global operations of Canaccord Genuity.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements. These
statements relate to future events or future performance and reflect
management’s expectations or beliefs regarding future events including
business and economic conditions and Canaccord’s growth, results of
operations, performance and business prospects and opportunities. Such
forward-looking statements reflect management’s current beliefs and are
based on information currently available to management. In some cases,
forward-looking statements can be identified by terminology such as
“may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”,
“estimate”, “predict”, “potential”, “continue”, “target”, “intend” or
the negative of these terms or other comparable terminology. By their
very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and a number of factors could
cause actual events or results to differ materially from the results
discussed in the forward-looking statements. In evaluating these
statements, readers should specifically consider various factors that
may cause actual results to differ materially from any forward-looking
statement. These factors include, but are not limited to market and
general economic conditions, the nature of the financial services
industry and the risks and uncertainties detailed from time to time in
Canaccord’s interim and annual consolidated financial statements and
its Annual Report and Annual Information Form filed on www.sedar.com. These forward-looking statements are made as of the date of this
document, and will not be updated or revised, except as specifically
required by applicable law.

SOURCE Canaccord Financial Inc.