BMO Financial Group to Acquire NY-based KGS-Alpha Capital Markets

-- Fixed income broker-dealer specializing in U.S. mortgage- and asset-backed securities 

-- Acquisition is complementary to BMO Capital Markets' U.S. strategy 

-- Acquisition adds experienced team, expands client footprint in the U.S. and makes BMO a leading broker-dealer in U.S. agency mortgage-backed securities

NEW YORK and TORONTO, May 1, 2018 /PRNewswire/ -- BMO Financial Group (NYSE, TSX: BMO) today announced that it has entered into a definitive agreement to acquire KGS-Alpha Capital Markets (KGS), a New York-based fixed income broker-dealer specializing in U.S. mortgage (MBS) and asset-backed securities (ABS) in the institutional investor market.  The transaction is subject to receipt of required regulatory approvals and other customary conditions and is currently expected to close in BMO's fourth fiscal quarter. Terms were not disclosed.

Founded in 2010, KGS has built a reputation for providing institutional clients with innovative market-based structuring solutions and first-class client service.  The company is a market leader in the structuring, trading and distribution in MBS and ABS product.  KGS offers unique idea-driven and market-based structures to help clients manage their portfolios.

KGS has 135 employees, including 84 sales and trading professionals, concentrated in New York with seven other offices across the U.S. 

The acquisition complements BMO Capital Markets' existing MBS trading business and immediately makes BMO a top tier dealer in securitized products with special emphasis on agency-backed residential and commercial MBS products.

"BMO has built a solid capital markets platform in the U.S.," said Pat Cronin, CEO, BMO Capital Markets. "The acquisition of KGS is highly complementary to our strategy, leverages our existing capabilities and allows us to better serve our clients. The size and scope of the MBS bond market represents a tremendous opportunity to continue to diversify our platform, and grow revenues with key new initiatives."

"KGS has developed a strong reputation with institutional investors by providing a differentiated value proposition through customized market-based solutions to manage risk," said Kelsey Gunderson, Managing Director and Head of Global Trading Products, BMO Capital Markets.  "In making this acquisition, we are broadening our distribution and expanding our offering through proprietary manufacturing capabilities."