Fiera merges Natcan into its operations, grows to $54 billion in AUM

The Natcan operations will be fully integrated into Fiera’s existing business. In return, the bank, through Natcan, will receive classA subordinate voting shares representing 35% of the issued and outstanding shares of Fiera along with an option to increase its stake to 40%.

Upon closing of the deal, the firm will change its name to Fiera Capital.Jean-Guy Desjardins will continue as chairman, CEO, CIO and controlling shareholder of Fiera.

“Our goal is to quickly become a major player in the ranks of North American asset managers,” says Desjardins.

“Fiera will have approximately $54 billion in assets under management as a result of the transaction, vaulting our firm into the ranks of the largest independent asset managers in Canada,” he adds.

“By combining Natcan’s business with Fiera and by becoming a significant long-term partner with them, we help Fiera to gain the critical mass and expertise required to compete with the best asset management businesses in Canada and globally,” says Louis Vachon, president and CEO of National Bank.

“The transaction fits perfectly with our plan of developing key partnerships in order to grow our reach in selected areas of our wealth management business. It also helps us keep focused on our own core business of growing our advice-based distribution capabilities, which is one of our strategic priorities,” explains Luc Paiement, National Bank’s executive vice president, wealth management.

The board of directors of Fiera has, following consultation with its financial advisors and legal counsels, determined that the transaction is fair, from a financial point of view, to Fiera shareholders and is in the best interests of Fiera, and unanimously recommends that shareholders vote in favour of the transaction.

Fiera has scheduled an annual and special meeting of shareholders for March 29, to, among other things, consider a resolution authorizing the issuance of the class A shares to be issued to National Bank at the closing of the transaction, along with certain other transaction-related matters.

Under the terms of the agreement, to acquire the Natcan business, Fiera will pay $309.5 million subject to reduction in certain circumstances, including $235 million at the closing of the transaction, and an amount of $74.5 million paid over time after closing unless certain minimum asset under management thresholds are not satisfied by National Bank and its affiliates. At closing, Fiera will issue approximately 19.71 million class A shares of Fiera, with the balance of the $235 million to be paid in cash.

National Bank has determined that the transaction will result in it realizing a gain of approximately $177 million, or $1.09 per share, and will increase its tier 1 capital by approximately 20 basis points. The transaction is expected to be earnings neutral for the bank on a recurrent basis.