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MONTREAL and TORONTO, May 31, 2018 /CNW Telbec/ - Fiera Capital Corporation (TSX: FSZ) ("Fiera Capital" or the "Company"), a leading independent asset management firm, announced today that it has completed the previously announced acquisition of the business of CGOV Asset Management ("CGOV"), an Ontario-based investment management firm focused on high-net-worth and institutional investors with approximately C$5.0 billion in assets under management as of March 31, 2018.
This transaction brings Fiera Capital's total AUM to over C$136 billion. It significantly increases the firm's presence in the Canadian high-net-worth market and adds critical mass with the addition of CGOV's institutional clientele. The transaction is expected to be modestly accretive (low to mid-single digit) to adjusted EPS within the first full year post closing.
"It is our pleasure to officially welcome the CGOV team to Fiera Capital, including Founding Partner Don Cranston and President Ted Ecclestone," said Jean-Philippe Lemay, President and Chief Operating Officer of Fiera Capital's Canadian Division. "The significant footprint and seasoned investment expertise gained as a result of the transaction enables Fiera Capital to be a competitive force in the high-net-worth segment in Canada."
"I am excited to join a thriving global asset management firm like Fiera Capital," said Ted Ecclestone, former President, CGOV, and now head of Fiera Capital's Canadian Private Wealth team. "This transaction will provide CGOV clients the ability to create more robust portfolios by augmenting their current portfolios with Fiera Capital's diverse suite of investment solutions. It will also provide a stable, long-term platform for the CGOV investment team to continue delivering value to our institutional clients. I look forward to working with the combined entity and I am confident that we have the right team in place to continue delivering value to clients."
The purchase price paid at closing, which remains subject to customary post-closing adjustments, totaled $114.2 million of which $48.2 million was paid in cash and $66 million was paid by the issuance of 5,541,561 Class A Subordinate Voting Shares of Fiera Capital ("Fiera Capital Class A Shares"). The Fiera Capital Class A Shares were issued at a price equal to $11.91, being the volume weighted average price of the Fiera Capital Class A Shares on the Toronto Stock Exchange for the period of 10 consecutive trading days ending on the last full trading day prior to the date of signature of the asset purchase agreement. The Fiera Capital Class A Shares have been placed in escrow and will be 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.
The seller also granted, today, 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 463,540 Fiera Class A Shares and 19,444,490 Class B Special Voting Shares of Fiera Capital, representing, in the aggregate, 20.63% of all issued and outstanding shares of Fiera Capital, including the Fiera Class A Shares issued to CGOV. Fiera Capital L.P. intends to exercise the option if its ownership interest in Fiera Capital decreases to under 20%. Assuming full exercise of the option on the date hereof, Fiera Capital L.P. would hold 6,005,101 Fiera Class A Shares and 19,444,490 Class B Special Voting Shares of Fiera Capital, representing, in the aggregate, 26.38% of all issued and outstanding shares of Fiera Capital.
Mr. Jean-Guy Desjardins, Chairman and CEO of Fiera Capital, indirectly controls Fiera Holdings Inc., the sole general partner of Fiera Capital L.P. As general partner of Fiera Capital L.P., Fiera Holdings Inc. determines how the shares of Fiera Capital held by Fiera Capital L.P. are voted.
An early warning report with additional information in respect of the transaction will be filed and made available on SEDAR at www.sedar.com under Fiera Capital's issuer profile. In order to obtain a copy of the early warning report, you may also contact Ms. Violaine Des Roches, Senior Vice President, Chief Legal and Chief Compliance Officer and Corporate Secretary at Fiera Capital, at telephone number: (514) 954-3750. Fiera Capital's head office and the address of Fiera Capital L.P. and of Jean-Guy Desjardins for these purposes is 1501 McGill College, Suite 800, Montreal, Quebec H3A 3M8.
This announcement contains forward-looking statements. Past performance is no guarantee of future results. All investments pose the risk of loss. Fiera Capital considers any statements that are not historical facts to be "forward-looking statements". Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, identify forward-looking statements. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by them.
With respect to management expectations regarding accretion resulting from this transaction in 2019, financial performance is based on information available to management and certain assumptions, including the accuracy of CGOV's financial statements, the level of CGOV client assets under management retained by Fiera Capital following the acquisition, as well as assumptions regarding the growth in CGOV assets under management transferred to Fiera Capital and realization of synergies. Actual results could differ depending on a number of factors, including the ability to retain key personnel following the acquisition, the ability to retain clients and assets under management following the acquisition and general market conditions.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements. In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement. These factors include, but are not limited to, market and general economic conditions, the nature of the financial services industry, and the risks and uncertainties detailed from time to time in Fiera Capital's interim and annual consolidated financial statements, and its Annual Report and Annual Information Form filed on www.sedar.com. These forward-looking statements are made as of the date of this document, and Fiera Capital assumes no obligation to update or revise them to reflect new events or circumstances.
This press release makes reference to adjusted EPS of Fiera Capital, which is a non-IFRS measure. Adjusted EPS is not a recognized measure under IFRS, does not have a standardized meaning under IFRS and is unlikely to be comparable to similar measures used by other companies. The rational for the use of the non-IFRS measures is presented in Fiera Capital's Management's Discussion and Analysis (MD&A), which is available on SEDAR at www.sedar.com.
About CGOV Asset Management
Established in 1995, CGOV Asset Management is an Ontario-based investment manager that manages approximately C$5.0 billion on behalf of high-net-worth clients and institutions. CGOV services over 400 families and 45 institutions, including foundations as well as Indigenous Trusts. The team specializes in traditional equity strategies: Canadian Equity, Global Equity and Total Equity.
About Fiera Capital Corporation
Fiera Capital is a leading independent asset management firm with approximately C$131.4 billion in assets under management as of March 31, 2018. The Firm provides institutional, retail and private wealth clients with access to full-service integrated money management solutions across traditional and alternative asset classes. Clients and their portfolios derive benefit from Fiera Capital's depth of expertise, diversified offerings and outstanding service. Fiera Capital trades under the ticker FSZ on the Toronto Stock Exchange. www.fieracapital.com
In the U.S., asset management services are provided by the Firm's U.S. affiliates who are investment advisers that are registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training.
Additional information about Fiera Capital Corporation, including the Firm's annual information form, is available on SEDAR at www.sedar.com.
SOURCE Fiera Capital Corporation