CI Fund Management Inc. announced two major acquisitions Friday, which will position it as the second-largest fund company in Canada. The firm is acquiring the Canadian operations of Assante Corp., as well as Synergy Asset Management Inc.

CI is paying for $846 million in cash and common shares of CI for Assante’s Canadian operations, which consist of an investment management business with $7 billion in assets under management and one of the country’s largest networks of financial advisors, with 1,000 advisers administering $17 billion in assets.

CI plans to operate Assante Canada as a separate entity that will continue to provide the wide range of products and services now offered by Assante advisors..

“The decision to sell is about expanding the company’s potential and accelerating its progress into the future. It’s about providing a number of substantive and far-reaching benefits to Assante shareholders, clients, advisors and employees,” said Assante CEO Marty Weinberg in a coference call Friday.

Weinberg gave several reasons for the sale, among them the Canadian operations will gain stability from operating as a stand-alone subsidiary of CI, under the Assante brand name.

As well, Assante will be used as a platform for growing the distribution network as the industry continues to consolidate.

Wineberg added that Assante clients and advisors will benefit from support of a powerful organization with broader range of products and services, and Assante employees will enjoy additional employment opportunities.

Assante’s U.S. businesses are going to be spun off. They are not included in this transaction. Wineberg said shares in the U.S. business will likely trade over the counter.

“In combination with our acquisition of Synergy Asset Management Inc. and Skylon Capital Corp., this transaction will transform CI, making it Canada’s second-largest fund company and giving it a significant presence in the business of providing financial advice directly to Canadians,” said Bill Holland, CI’s president and CEO, in a news release.

CI will issue 42.623 million CI common shares, worth approximately $571 million (based on yesterday’s closing price of $13.40), and pay $275 million in cash for Assante Canada. The transaction values Assante Canada at $8.25 per Assante share.

Major shareholders of Assante representing 32% of the firm’s shares have committed to vote their shares in favour of CI’s offer. In addition, CI already owns 9.1% of Assante shares.

Sun Life Financial Inc. has agreed to support the transaction by purchasing approximately 20.1 million common shares of CI for $258.3 million. As a result, Sun Life will maintain its ownership interest in CI at 34%.

The transaction, which is subject to approval by regulators and Assante shareholders, is expected to close prior to the end of the year.

CI is also buying Synergy Asset Management Inc. for approximately $116 million. CI has agreed to issue 1,655,874 common shares of CI and pay $94.3 million cash for Synergy. Synergy has assets of approximately $1.4 billion in 24 funds.

Sun Life Financial Inc. has agreed to support the transaction by purchasing 860,652 shares of CI for approximately $10.8 million. On closing, this will maintain Sun Life’s ownership interest in CI at 34%.

These two deals are coming one day after CI announced the takeover of Skylon Capital Corp. The total value of the three deals is estimated at $1 billion.

“As well as maintaining consistent performance, Synergy has had positive net sales every single month since inception, has developed a strong rapport with advisers and investors, and has successfully developed a well-recognized brand over the past five years,” said Holland.

“Synergy is an excellent fit with CI and we plan to offer a Synergy family of funds as part of our lineup,” Holland added.

“In addition to merging our two outstanding fund families, another key reason we made this decision was that we felt Joe Canavan has the proven leadership skills and expertise to join CI in an executive capacity, overseeing the company’s distribution strategy.”

Canavan is the founder, president and CEO of Synergy.

The acquisition of Synergy, which will be debt-free on closing and has approximately $55 million in available tax losses due to cash financing of deferred sales commissions, will be immediately accretive to CI’s earnings, cash flow and EBITDA (earnings before interest, taxes, depreciation and amortization).

The transaction, which is subject to regulatory approval, is expected to close in October 2003 following the required notification to unitholders of the Synergy Mutual Funds.