Windsor, Ont.-based Sterling Mutuals Inc. has acquired Waterloo, Ont.-based mutual fund dealer Armstrong & Quaile Associates Inc., the firms announced on Monday. The purchase is Sterling Mutuals’ sixth and largest since the firm’s founding in 1996.
The purchase price wasn’t disclosed.
“It’s an opportunity for us to continue our expansion plans,” says Nelson Cheng, Sterling Mutuals’ CEO, of the merger. More specifically, Sterling Mutuals will now have a stronger presence in areas such as Eastern Ontario.
The acquisition adds more than $1.3 billion in assets under administration (AUA) to Sterling Mutuals and brings its total AUA to roughly $3 billion. As well, Sterling Mutuals now has almost 300 advisors and assistants nationwide.
Armstrong & Quaile is a good match for Sterling Mutuals, Cheng says, because the two dealers have similar business models, particularly in regards to compensation (Sterling offers advisors an 80/20 payout).
The acquisition also means Sterling will have the economies of scale necessary to remain competitive amid increasing costs and efforts required to meet regulatory changes in the investment industry, such as the second phase of the implementation of the client relationship model (a.k.a. CRM2), Cheng says.
Armstrong & Quaile was founded in 1991 and operates in 35 branches across Canada with almost 200 advisors and assistants. Advisors with Armstrong & Quaile will immediately begin operating under the Sterling Mutuals name although it will otherwise be business as usual. Says Cheng: “It’s not expected to be a very disruptive move for the advisors.”
Ken Armstrong, president of Armstrong & Quaile, will remain with Sterling Mutuals as an advisor. Heather Phillips, Armstrong & Quaile’s CEO, is now vice president, business development for Sterling Mutuals.
Toronto-based JV Venture Partners Ltd. advised Sterling Mutuals on the financing and purchasing of Armstrong & Quaile.