Fiera Capital Corporation (TSX: FSZ) has reached an agreement to acquire the business of CGOV Asset Management for $114.2 of which 42% is payable in cash on closing and 58% is payable in Class A Subordinate Voting Shares of Fiera Capital at a deemed price of $11.91.
Established in 1995, Toronto based CGOV is an investment management firm focused on high-net-worth and institutional investors with approximately $5.3 billion in assets under management as of December 31, 2017.
Following completion of the transaction, CGOV partners and key employees will be joining Fiera Capital including Ted Ecclestone, who will lead Fiera Capital’s Canadian Private Wealth team. Ecclestone has over 20 years of investment experience and joined CGOV in 2006, after holding senior roles at TAL Private Management and Rockwater Capital.
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The transaction is expected to close in Q2 2018, and is subject to customary regulatory approvals, including the approval of the Toronto Stock Exchange.
“We are excited to combine CGOV with Fiera Capital to enhance our leading Canadian high-net-worth platform and further strengthen our institutional investment management capabilities. CGOV has a rich history of success and growth and brings a proven management team,” said Jean-Guy Desjardins, Chairman of the Board and Chief Executive Officer of Fiera Capital.
“With a solid base in Ontario and Western Canada, the critical mass gained as a result of the transaction allows Fiera Capital to be a competitive force in the highly attractive high-net-worth segment across Canada. The transaction is Fiera Capital’s strongest commitment yet to developing leading solutions for both existing and new high-net-worth clients,” commented Jean-Phillipe Lemay, President and Chief Operating Officer of Fiera Capital’s Canadian Division. “Together, we will clearly be stronger, and are excited about the prospect of also growing our institutional offering through the addition of CGOV’s investment expertise within Fiera Capital’s already strong investment platform.”
“The combination of the CGOV team with Fiera Capital is an exciting opportunity for CGOV and its clients. The transaction will provide a stable, long-term platform for our investment team to continue delivering value. It will also bring robust investment solutions to CGOV clients, including access to enhanced fixed income and private alternative strategies,” commented Don Cranston, Founding Partner and Chairman of CGOV Asset Management.
The Fiera Capital Class A Shares shall be placed in escrow and released over a five year period following transaction closing subject to certain terms and conditions. Approximately 16.7% of the Fiera Capital Class A Shares placed in escrow will be released after a five year period only if Fiera Capital retains at least 80% of institutional assets under management of CGOV after a four year period following closing.
On the closing date of the transaction, the seller will grant an option to Fiera Capital L.P. entitling Fiera Capital L.P. to purchase the Fiera Class A Shares at their market value at the time of exercise of such option in consideration for units of Fiera Capital L.P. Such purchase would be exempted from applicable take-over bid requirements under the private agreement exemption. Fiera Capital L.P. currently holds 495,629 Fiera Class A Shares and 19,444,490 Class B Special Voting Shares of Fiera Capital, representing, in the aggregate, 22.07% of all issued and outstanding shares of Fiera Capital.
photo credit: CGOV
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