Jovian Capital Corp.’s wholly-owned subsidiary, Jovian Asset Management Inc., has partnered with Toronto-based Fairway Asset Management Corp., growing Jovian’s managed assets by approximately $600 million.
Fairway is a holding company that owns a number of Canadian asset management companies, including 100% of the issued and outstanding shares of Fairway Capital Management Corp. — a Canadian-based financial services firm that manufactures, markets and manages investment products.
The key Fairway officers and directors, including Steven Hawkins, Gordon McMillan and Andrew McKay, will remain with Fairway and will continue to be central in the continued growth of Fairway and other Jovian businesses. Jovian intends to transfer a number of its current product brands into the Fairway business.
In exchange for 100% of the Class “A” shares and 49% of the Class “C” shares of Fairway, Jovian has paid $11 million in cash, has issued seven million common shares, and has issued a convertible debenture in the principal amount of $6 million for a total purchase price of approximately $23.3 million, representing an estimated four times EBITDA multiple.
The convertible debenture matures in two years, carries a 6% annual coupon, is convertible into common shares of Jovian at a price of $0.95 per common share, and contains a forced conversion component based on the trading price of Jovian’s common shares. Jovian has also been granted a conditional option to acquire the remaining Class “C” Shares of Fairway. The transaction has closed in escrow, pending receipt of all necessary regulatory approvals in the next few weeks.
“We are very excited to be partnering with the Jovian Group of Companies. Their business structure and management talent will provide us with an opportunity to enhance the growth and success of the financial services we deliver,” said Steven Hawkins, president and COO of Fairway.
“From initial discussions to completion, this transaction proceeded quickly. We saw an opportunity to continue our strategy to build a substantial presence in the asset management business,” added Jovian president and CEO Philip Armstrong. “We are excited to welcome Fairway and its management team to the Jovian community. I have a long-standing relationship with Fairway’s management and we have a shared approach to business and a dedication to developing innovative financial solutions for investors. We look forward to working with Fairway to grow their business in partnership with Jovian.”