Upon completion of the transaction, Dundee Wealth will emerge with more than $36 billion in assets under management and administration and over 3,800 independent advisors located in over 350 branches across the country, making it the largest independent financial advisory force in Canada.

Mutual fund distributor Cartier has $16 billion of assets under administration and a roster of 2,700 independent financial advisors and 700 insurance-only advisors.

“Because both companies share the same philosophy of financial advisor independence this acquisition is a great fit further reinforcing Dundee’s support of the independent financial advisor,” said Ned Goodman, chairman, president and CEO of Dundee Wealth, in a news release.

Dundee Wealth has agreed to make a take-over bid to acquire 100% of the issued and outstanding common shares of Cartier on the basis of $0.54 cash and 0.021192 of a Dundee Wealth common share for each common share of Cartier. Based upon a $7.55 share price for Dundee Wealth, this represents 70¢ per Cartier share.

Dundee Wealth will also at the same time the outstanding debt of Cartier and Cartier Mutual Funds, a 70% subsidiary of Cartier, that is owed to its controlling shareholder Cartier Capital Limited Partnership approximating $90 million, as well as the remaining 30% of Cartier Mutual Funds which Cartier Capital owns for approximately $3.09 million cash and 120,934 Dundee Wealth common shares.

Cartier’s board of directors has concluded that the Dundee Wealth offer is fair to the minority shareholders of Cartier, in the best interests of Cartier and has unanimously approved the offer. It will recommend that Cartier shareholders tender their shares to the offer.

Cartier Capital, a limited partnership and the controlling shareholder of Cartier, holds approximately 119.5 million common shares representing approximately 69% of the outstanding common shares of Cartier. Cartier Capital has entered into a lock-up agreement with Dundee Wealth pursuant to which it has agreed to irrevocably tender its 69% ownership in Cartier to the Dundee Wealth offer.

Jean Dumont, chairman of Cartier, will be joining the board of directors of Dundee Wealth on completion of the deal.

Dundee Wealth says it intends to immediately establish an integration committee to plan the integration of Cartier following completion of the transaction. The committee will be chaired by Don Charter, chairman and CEO of Dundee Securities and executive VP of Dundee Wealth, and will also include Dan Richards, CEO of Cartier.

There have not yet been any decisions made in terms of who will make up the senior management team of the combined firms.

During a conference call with analysts and the media, Dundee executives indicated that they plan to retain all of Cartier’s reps following completion of the transaction. Dundee’s management team says that it is confident that it can, over time, upgrade the quality of Cartier’s sales force to match its own. Only about 350 of Cartier’s reps are licensed by the Investment Dealers Association of Canada, the rest are restricted to mutual funds under Mutual Fund Dealers Association licenses. “We acquire all of Carter because we want it, there are no plans to sell off parts of Cartier,” noted Dundee’s Don Charter.

“We understand this business sufficiently to know how to make advisors efficient,” said Goodman.

There will not be any retention packages for Cartier’s top advisors. The executives indicated that both firms already have a strong record of retaining advisors, and noted that Cartier’s equity ownership plan will be rolled into Dundee’s plan.

It is anticipated that the offer will be mailed within two weeks subject to satisfaction of certain conditions. Once mailed, the offer will be open for at least 35 days unless withdrawn or extended. Completion of the offer will be conditional upon 66 2/3% of the outstanding Cartier shares being tendered as well as other customary conditions including all necessary regulatory consents and approvals.

Under certain circumstances, a break-up fee of $5 million is payable by Cartier if a competing offer is successful, however, the Cartier Capital lock-up agreement does not permit it to tender its 69% interest in Cartier to another offer.

Dundee Bancorp Inc., the parent company of Dundee Wealth has agreed to provide $190 million in bridge financing in connection with the Cartier acquisition. Dundee Bancorp owns approximately 84% of Dundee Wealth.

Standard & Poor’s Ratings Services today said that the announcement by Dundee Wealth to acquire Cartier would not affect the ratings or outlook on Dundee Bancorp.