01:15:13 EDT Fri 09 Jun 2023
Enter Symbol
or Name

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Guardian Capital Group Ltd
Symbol GCG
Shares Issued 2,749,379
Close 2022-11-30 C$ 38.00
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Guardian Capital to sell three businesses to Desjardins

2022-11-30 09:37 ET - News Release

Mr. George Mavroudis reports


Desjardins Group and Guardian Capital Group Ltd. have entered into definitive agreements for Desjardins to acquire Guardian's life insurance, mutual fund and investment distribution networks. Specifically, Desjardins will acquire IDC Worldsource Insurance Network Inc. (IDC), one of the largest life insurance managing general agencies (MGAs) in Canada; Worldsource Financial Management Inc. (WFM), a mutual fund dealer; and Worldsource Securities Inc. (WSI), a full-service investment dealer.

IDC, WFM and WSI serve more than 5,000 independent advisers in the Canadian insurance and financial advice markets.

The acquisition will position Desjardins as a leader in the independent distribution of life insurance and retail investment products in Canada, with more than $2-billion in life insurance premiums in force and $43-billion in combined assets under administration in mutual funds, segregated funds and securities as at June 30, 2022.

Following the closing of the transaction, Desjardins plans to operate the acquired companies as stand-alone entities and expects them to continue being led by the current teams of management and employees. The companies will continue supporting advisers' core beliefs to maintain independence with respect to open architecture for products and solutions.

"This acquisition strengthens Desjardins in the important life insurance and wealth management sectors across Canada," said Guy Cormier, president and chief executive officer of Desjardins Group. "On the insurance side, it extends our market reach and positions us as a leader in life insurance independent distribution in Canada. On the financial advisory side, the mutual fund and securities dealers will enhance and strengthen our distribution of retail investment products. With this added bench strength, Desjardins will be able to serve more Canadians and achieve critical mass to generate the financial flexibility to innovate and invest to better meet the needs of our members, clients and advisers.

"All three acquired companies align with Desjardins's values and commitment to win the trust of members and clients and will continue building on their outstanding growth serving clients through the independent adviser channel. We look forward to welcoming the leaders, employees and advisers and supporting their continued impressive success going forward," he added.

George Mavroudis, president and chief executive officer of Guardian, said: "We are proud of the quality of wealth businesses we have built. Our success has been made possible by remaining patient and building long-standing trusted relationships between advisers and our company. This was all made possible due to the strong leadership and collaborative efforts of our dedicated executive team, employees and advisers." He further noted: "At the same time, we take great comfort in having Desjardins succeed us as owners of these businesses. Desjardins has the vision, resources and long-term commitment to offer the employees and advisers an environment to thrive and reach even greater levels of success."

He added: "This transaction unlocks meaningful value for Guardian's shareholders while simultaneously streamlining its operations to focus on its core investment management business. We look forward to continuing to build best-in-class investment solutions for investors and growing our diverse investment management business across all client segments, including institutional, retail and private wealth."

The purchase price under the purchase agreements is $750-million, subject to customary purchase price adjustments, a portion of which will be distributed to minority shareholders of IDC. In addition to the proceeds expected to be received under the transaction, Guardian has a portfolio valued at $648-million as at its last quarter-end of Sept. 30, 2022.

As a result of this acquisition, Desjardins will accelerate its growth strategy for the broader Canadian market, a key focus for the organization in recent years. The acquisition of State Farm's Canadian operations in 2015 positioned Desjardins as the second-largest P&C (property and casualty) insurer in the country. More recently, the partnership with Canada's five provincial credit union centrals and CUMIS (Credit Union Protection, Insurance & Financial Solutions) in 2017 created Aviso Wealth, which administers and manages over $100-billion in assets and is now one of the largest independent wealth management firms in the country.

The transaction is expected to close in the first quarter of 2023 and is subject to customary closing conditions, including regulatory approvals. A copy of the purchase agreements will be made available under Guardian's SEDAR profile.

BMO Capital Markets is acting as financial adviser to Guardian and provided a fairness opinion to its board of directors. Borden Ladner Gervais LLP and PMG LLP are acting as legal and tax advisers, respectively, to Guardian. Desjardins Capital Markets is acting as financial adviser and Stikeman Elliott LLP is acting as legal adviser to Desjardins.

About Guardian Capital Group Ltd.

Guardian Capital Group is a diversified, global financial services company operating in two main business segments: investment management and wealth management. As at Sept. 30, 2022, Guardian had $47.6-billion of assets under management and $26.8-billion of assets under administration while managing a proprietary investment portfolio with a fair market value of $648-million. Through its subsidiaries, Guardian provides extensive investment management solutions to institutional and private wealth clients while offering comprehensive wealth management services to financial advisers in its national mutual fund dealer, securities dealer and insurance distribution network. Founded in 1962, Guardian's reputation for steady growth, long-term relationships, and its core values of trustworthiness, integrity and stability have been key to its success over six decades. Its common and Class A shares are listed on the Toronto Stock Exchange as GCG and GCG.A, respectively.

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