With the acquisition of three divisions of Guardian Capital Group, Desjardins Group continues to expand outside Quebec.
The Lévis financial cooperative has reached an agreement with Guardian Capital Group to acquire its distribution activities in insurance, mutual funds and securities. The transaction, announced Wednesday, is valued at $750 million. The sale of assets brings “significant value creation” for the shareholders of the company, estimates Phil Hardie, of Scotiabank, who estimates the value of the net assets of the acquisitions at “just under” 410 million.
The president and CEO of Desjardins Group, Guy Cormier, believes that the cooperative is also a winner from the agreement. “Since 2015, we have been very clear: in our strategic orientations, we want to diversify our sources of revenue across Canada and expand,” he explains in an interview. This transaction is hyperstrategic because it fits very well with what we wanted to do. »
The acquisition allows Desjardins to expand its distribution network across Canada. “We already had nearly 2,000 independent advisors across Canada, recalls the leader. There, we add 5000. We will go to 7000. They are still independent advisors who will continue to offer the range of products available to them, but it is clear that this gives us an additional opportunity to increase our distribution. . »
The portfolio of the three divisions includes 2 billion in life insurance premiums in force and 43 billion in assets under management, as of June 30.
The profile of the divisions acquired is attractive, adds Desjardins Group Chief Operating Officer Denis Dubois. He mentioned that it was a growing business and had a high satisfaction rate among member advisors. “We see that this team is capable of growing by recruiting new advisors or making acquisitions. Guardian’s business will operate independently and its current management teams and staff will remain. “For us, there is no question of going to play in the very good performance. On the contrary, we want to learn, develop, grow. »
The three divisions that will change hands are insurer IDC Worldsource Insurance, mutual fund distribution network Worldsource Financial Management and securities distributor Worldsource Securities.
Since acquiring the Canadian operations of State Farm in 2015, Desjardins Group has focused on its expansion strategy outside Quebec. About a third of the co-op’s revenue comes from the rest of Canada.
The transaction is expected to close in the first quarter of 2023, subject to customary closing conditions, including certain regulatory approvals.