Cowen Stock Is Gaining. TD Is Buying the Investment Bank for $1.3 Billion.

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The transaction is valued at $1.3 billion, or $39 for each share of Cowen common stock.

Roman Tiraspolsky / Dreamstime

Cowen stock was rising after the company agreed to be acquired by Toronto-Dominion Bank in an all-cash transaction.

Both companies announced in a news release on Tuesday a definitive agreement for Toronto-Dominion Bank (ticker: TD) to acquire Cowen (COWN) in an all-cash transaction valued at $1.3 billion, or $39 for each share of Cowen common stock.

“The acquisition will provide new capabilities and increased depth in key business lines to meet our clients’ needs and will allow us to leverage our combined expertise, talent, and integrated offerings across a much larger client base,” Chief Executive of TD Bank Group, Bharat Masrani, said in the release.

After the deal closes, parts of the combined business will be known as TD Cowen, a division of TD Securities, according to the release.

Shares of Cowen were 7.1% higher in premarket trading Tuesday to $38.01, while Toronto-Dominion Bank shares were up 0.3%. Coming into Tuesday trading, Cowen stock had fallen 1.7% while Toronto-Dominion Bank shares had dropped 16% in 2022.

Write to Angela Palumbo at angela.palumbo@dowjones.com