Benefits Canada Fiera Sceptre Inc. has announced it will buy the business of Natcan Investment Management Inc. from National Bank of Canada for $309.5 million.
The deal catapults Fiera Sceptre to the fifth largest independent asset manager in Canada, with $54 billion in assets under management
“The acquisition of the Natcan business adds to our established earnings base, brings additional research and portfolio management depth, and enhances an already strong platform, positioning us for future growth,” said Jean-Guy Desjardins, chairman, CEO, CIO and controlling shareholder of Fiera. “Our goal is to quickly become a major player in the ranks of North American asset managers.”
Natcan will be fully integrated into Fiera’s existing business.
Under the deal, National Bank will receive class A subordinate voting shares representing 35% of the issued and outstanding shares of Fiera, along with an option to increase its stake to 40%.
“The transaction fits perfectly with our plan of developing key partnerships in order to grow our reach in selected areas of our wealth management business,” said Luc Paiement, executive vice-president, wealth management at National Bank. “It also helps us keep focused on our own core business of growing our advice-based distribution capabilities, which is one of our strategic priorities.”
Fiera will pay $309.5 million subject to reduction in certain circumstances, including $235 million at the closing of the transaction, and an amount of $74.5 million paid over time after closing unless certain minimum asset under management thresholds are not satisfied by National Bank and its affiliates.
At closing, Fiera will issue approximately 19.71 million Class A Shares of Fiera, with the balance of the $235 million to be paid in cash.
Fiera and the bank have entered into a seven-year AUM agreement under which the bank will be required to pay certain amounts to Fiera in the event a specified minimum AUM ratio is not maintained.
“Combining the portfolio management expertise and research capabilities of Natcan and Fiera will create a powerhouse asset manager that will have the talent to create innovative products and the bench strength to successfully compete for a broad range of investment mandates,” said Desjardins.
The transaction is subject to regulatory and shareholder approval, and is expected to close by April 30, 2012.