Guardian Capital Group has agreed to divest its mutual fund, life insurance, and investment distribution networks to Canada-based financial services cooperative Desjardins Group, in a deal worth C$750m ($559m).
Under the terms of the agreement, Desjardins will acquire IDC Worldsource Insurance Network (IDC), Worldsource Financial Management (WFM), and Worldsource Securities (WSI) from Guardian Capital.
IDC is a Canadian life insurance managing general agency, while WFM is a mutual fund dealer. WSI is a full-service investment dealer.
The three companies are said to serve over 5,000 independent advisors in the insurance and financial advice markets in Canada.
Guardian Capital president and CEO George Mavroudis said: “This transaction unlocks meaningful value for Guardian’s shareholders, while simultaneously streamlining its operations to focus on its core investment management business.
“We look forward to continuing to build best in class investment solutions for investors and growing our diverse investment management business across all client segments, including institutional, retail, and private wealth.”
Upon closing of the deal, Desjardins intends to run the acquired companies as standalone entities, and expects to maintain current teams of management and employees.
As of 30 June 2022, Desjardins is claimed to have over C$2bn ($1.5bn) in life insurance premiums and C$43bn in combined assets under administration in mutual funds, segregated funds, and securities.
Desjardins Group president and CEO Guy Cormier said: “This acquisition strengthens Desjardins in the important life insurance and wealth management sectors across Canada.
“On the insurance side, it extends our market reach and positions us as a leader in life insurance independent distribution in Canada. On the financial advisory side, the mutual fund and securities dealers will enhance and strengthen our distribution of retail investment products.
“With this added bench strength, Desjardins will be able to serve more Canadians and achieve critical mass to generate the financial flexibility to innovate and invest to better meet the needs of our members, clients and advisors.”
Through the acquisition, Desjardins is expected to bolster its growth and position in life insurance and wealth management sectors in the Canadian market.
The transaction, which is subject to customary conditions and regulatory approvals, is anticipated to close in Q1 2023.
