After watching its -parent acquire companies at a dizzying pace for the past three years, Rice Financial Group Inc. has gotten into the game itself with a pair of acquisitions.

The Winnipeg-based financial planning firm has purchased the assets and revenue stream from Sawyer & Sawyer Ltd. ’s operations in Manitoba, Saskatchewan and Ontario. Victoria-based Sawyer, which specializes in life insurance and segregated funds, will continue to operate on its own in Alberta and British Columbia.

Rice has also acquired Calgary-based Kemp Consulting Ltd. , an administrator of employee-benefit plans covering about 3,500 workers.

Mal Anderson, Rice’s president and CEO, says the addition of almost 1,000 Sawyer clients significantly beefs up Rice’s presence in the life insurance sector, while the Kemp acquisition does the same for its group-benefits business. The dollar value of both transactions, which were completed within a week of one another, was not disclosed. Both were purchased for cash.

“They’re both judicious acquisitions that fit the areas we want to build,” Anderson says. “I expect you’ll see more from us in the next while.”

Rice has branches from B.C. to Ontario, more than 85,000 clients and administers more than $3.9 billion in assets.

Historically, the company has expanded in the Prairies but, Anderson says, it now wants to strengthen its presence in Ontario, B.C. and the Maritimes. It looks at each acquisition opportunity from an “ability to build on” basis, he says: “We’re not just out buying everything.”

Philip Armstrong, CEO of Rice’s parent, Jovian Capital Corp. , which has joint head offices in Winnipeg and Toronto, says if a strategic acquisition is to be made in a new business area, it will probably be done by Jovian.

“But our subsidiaries — Rice, Leon Frazer & Associates Inc. and T.E. Financial Consultants Ltd. — also have the ability to make roll-up acquisitions in their own businesses,” Armstrong says.

It would not have made sense for Jovian to buy Sawyer or Kemp and have each company continue to operate independently. “Their basic businesses are so close to what Rice does, it made sense for Rice to make the acquisitions,” he says. “There are so many synergies with Rice. Both these acquisitions are an attempt to get a little bit more geographical reach.”

Jovian purchases are typically much larger, and the acquired companies continue to operate on their own and use their own brands.

Armstrong agrees with An-derson’s assessment of where Rice should expand next, particularly when it comes to Canada’s most populous province. “Rice’s presence in Ontario is still fairly small. It’s only represented in Ottawa to any great extent,” says Armstrong. “We’d be very interested in establishing a presence in Ontario and we’d be pretty flexible how we’d do that. If we found the right partners in Toronto, we’d do it that way.

“But, given Rice’s historical growth patterns, we’d be more likely to expand in small-town Ontario than in Toronto and the larger cities,” he adds.

AGGRESSIVE PURCHASER

Jovian has been making great strides in the past three years since it merged with Rice’s then-parent Rice Capital Management Plus Inc. Since then, Armstrong says, Jovian has been an aggressive purchaser, acquiring MGI Securities Inc. , alternative-securities manager Pescara Partners Inc. and high net-worth manufacturer Accumulus Management Ltd. Along the way, Jovian’s assets under administration have grown to $11.7 billion from about $3.7 billion.

“The past year, in particular, has been incredibly good for us. Each quarter, we’re gaining momentum,” Armstrong says.

Robin Cornwell, a financial services analyst who follows Jovian for Toronto-based Catalyst Financial Services Equity Research, applauds both of Rice’s moves. He says there aren’t a lot of big acquisitions to be made in the current market.

“Unless you go after Berkshire [TWC Financial Group Inc. ] or something like that, you do the tuck-in acquisitions and keep consolidating the group,” he says.

There is no question that Jovian is one of the fastest-growing financial services companies in the country, Cornwell adds. Perhaps more important, Jovian has been fulfilling its commitment to grow.

“It has delivered. It’s pretty impressive,” says Cornwell. “The market isn’t paying for management’s delivery; I’m kind of surprised by that. Its story has to be continually told and management has to keep building the company and delivering the profit.”

Jovian certainly delivered in the first quarter of fiscal 2007. For the three months ended June 30, it reported net profit of $3.9 million, up from just $81,000 a year earlier. Jovian shares peaked at a record high of $1.20 a share in May but have hovered between 80¢ and $1 all summer. Armstrong says Jovian’s greatest challenge is to raise the public profile of itself and its subsidiaries, to build them up so they have a national presence.

@page_break@Anderson says both of Rice’s deals were advanced by long-standing friendships between key executives. The Sawyer deal was led by Fred Wing, Rice’s executive vice president, because of his strong relationship with the planning firm’s president, David Sawyer. Don Wright, Rice’s vice president of employee benefits, played a similar pivotal role in the Kemp acquisition.

Trevor Kemp, founder and president of Kemp Consulting, agrees, but says the deal, first and foremost, makes good business sense.

“The alliance with Rice Financial is a great opportunity to join a national organization with resources to enhance the value and service clients are already receiving,” he says.

The deal had been in the works since last November, when, Kemp says, he informed Rice officials of his desire to cut back his workload and find a buyer for the firm. He will remain a group sales consultant with Rice on a part-time basis.

Sawyer says it was both a desire to ensure his clients had the best service possible and his trust in Rice’s management that made the decision to sell an easy one.

“The well-established distribution system at Rice in these provinces,” he says, “reassured me that client needs will be met by advisors who are in close proximity to them.” IE