Canaccord Genuity Group Inc.’s dealmakers turned in their best quarter ever after a flood of cheap capital for corporations fueled a boom in acquisitions and drove a surge in profit.

Net income rose 87 per cent from a year earlier to $61.8 million (US$49.7 million) in the three months through Sept. 30, the company said Monday. Profit was 58 cents a share, excluding significant items, on a diluted basis.

Chief Executive Officer Dan Daviau said companies are awash in capital, helped by low interest rates and rising equity markets, making it easier for them to spend money on long-term strategic priorities. Advisory revenue in the fiscal second quarter rose to a record $139.4 million, including $103.6 million from the U.S., where Canaccord’s 2019 acquisition of the Petsky Prunier merger boutique is driving gains. 

“The M&A market is remarkably strong,” Daviau said in an interview. “What tends to drive M&A is access to money -- and there’s tons of debt out there, and there’s tons of equity out there, so you’ve got a pretty vibrant M&A market.”

The pipeline of acquisition activity is strong for the next two quarters for sure and probably even for another full year, Daviau said.   

Canaccord soared as much as 8 per cent to $16.43 as of 9:39 a.m. in Toronto, the biggest intraday gain since November 2020. Shares of the company, which is legally based in Vancouver but largely run from Toronto, have risen 42 per cent this year, topping the 24 per cent gain of the S&P/TSX Composite Index.

Total revenue for Canaccord’s global capital-markets businesses rose 26 per cent to $304.9 million, with the gains in advisory fees more than making up for lower client trading activity and reduced issuer activity. 

Elsewhere, revenue in the global wealth-management business climbed 14 per cent to $166.2 million, driven by gains in all three major segments of North America, the U.K. and Australia. 

The period of higher earnings throughout the pandemic and Canaccord’s $218 million sale of a 22 per cent stake in its U.K. wealth-management business earlier this year have left Canaccord with $1.73 billion in cash on its balance sheet at the end of the quarter, up 91 per cent from a year earlier.

Canaccord may use its extra capital to buy back stock, bolster its wealth business in Canada and the U.K., potentially through acquisitions, and strengthen its merger-and-acquisition business, Daviau said. 

“From a balance-sheet perspective, we’re really, really strong,” Daviau said. “You’ll continue to see us use our balance sheet intelligently in the next several months.”