BMO Financial Group has agreed to acquire Burgundy Asset Management, an investment management firm based in Canada, in an all-stock deal worth up to around C$625m ($456.4m)
The deal is expected to enhance BMO’s wealth management services for high-net-worth and ultra-high-net-worth individuals, families, and institutions.
It aligns with BMO’s strategy to strengthen its presence in the Canadian Investment Counsel sector.
Burgundy Asset Management, headquartered in Toronto, has been operating since 1990. The company also has offices in Montreal and Vancouver, and manages approximately C$27bn ($19.7bn) in assets.
The firm focuses on discretionary investment management for private clients and institutions such as foundations and pensions using a quality/value investment approach.
As part of the agreement, Burgundy Asset Management will become part of BMO’s wealth management division, while maintaining its operations under the leadership of CEO Robert Sankey. Co-founders Tony Arrell and Richard Rooney will also continue their roles.
BMO wealth management group head Deland Kamanga said: “Burgundy Asset Management is one of Canada’s most respected independent investment managers known for its high calibre team, rigorous investment process and dedicated service to private clients, institutions and family offices.
“The acquisition will build on BMO’s heritage as a client-focused wealth manager while expanding our wealth advice and private investment counsel offering.”
The transaction, payable in BMO common shares, with C$125m ($91.2m) held back contingent upon Burgundy Asset Management achieving certain asset management benchmarks within 18 months post-closing.
An additional earn-out may be paid depending on future growth achievements. The acquisition is anticipated to conclude by the end of this year, pending regulatory approvals and customary closing conditions.
Burgundy Asset Management chairman and co-founder Tony Arrell said: “It has always been our intention to build Burgundy for the long run, so we can serve our clients and their families across generations.
“We are happy to be joining BMO, a North American leader, and believe this is a great opportunity to continue to serve our clients well into the future.”
Financial advisory services were provided to Burgundy Asset Management by KMS Capital, Origin Merchant Partners, and PJT Partners, with legal counsel from Torys LLP. BMO was advised exclusively by BMO Capital Markets, with Osler, Hoskin & Harcourt serving as legal counsel.
