(Montreal) Thanks to an update of international accounting standards, iA Financial Group now has five times more money available to make an acquisition in the United States.
The adoption of IFRS 17 accounting standards, in January 2023, may seem like an obscure subject, but it has concrete effects on the potential for growth through acquisitions of the Quebec company.
The former Industrial Alliance has available capital of 1.8 billion. Under the old IFRS 4 standard, the surplus would have been 350 million instead. “It’s big,” commented its president and CEO, Denis Ricard, in an interview on the sidelines of a speech to the Canadian Club of Montreal.
In a “simplistic” way, the leader explains that certain elements that the company considered as a liability must now be considered as part of the capital.
Under the previous standards, iA Financial Group would have had less leeway. “If we had wanted to buy a company at 1 billion, we would have had to seek external financing,” he explains. While there, we will not need to seek external funding and pay more. »
iA Financial Group reviews potential acquisition files with “particular” attention to the United States. The company is targeting the two segments where it is already present in the United States: individual insurance and mechanical warranties for car dealerships.