Fundco consolidation plays close

A pair of high profile deals in the mutual fund industry closed today, with Scotiabank finalizing its acquisition of DundeeWealth, and AGF closing its deal to buy Acuity.

Scotiabank announced that 118 million common shares – as well as all special shares, series C and first preference shares, series X – had been tendered to the bank’s offer, which expired at 12:01 a.m. today.

“We are committed to building on our individual strengths in serving clients, providing value to our shareholders and offering employees a great place to work,” said Chris Hodgson, group head, Scotiabank Global Wealth Management. “In the days ahead, we will be working closely with David Goodman and the DundeeWealth team to provide a seamless transition for our stakeholders.”

Scotiabank now owns 97.06% of the issued and outstanding common shares and all of the issued and outstanding special shares. The remaining shares will be acquired under the compulsory acquisition procedures of the Business Corporations Act (Ontario)

“This is an exciting stepping stone for DundeeWealth in our pursuit of international exposure, growth and recognition,” said David Goodman, president and CEO of DundeeWealth. “By remaining focused on the same ambitions of entrepreneurialism and independent thinking that have guided our past, we move forward confidently into the future with the support of a new partner. DundeeWealth’s relationship with Scotiabank offers our shareholders immediate value and a strong promise for the future.”

Dundee Corporation, the majority shareholder in DundeeWealth, tendered its 69.9 million common shares and 5.4 million First Preference, Series X shares, and will receive nearly 18.6 million common shares in Scotiabank, along with 14.9 million preferred shares. Dundee Corp. will also receive a $149 million dividend from DundeeWealth and 74.5 million common shares of Dundee Capital Markets Inc.

“This is an important milestone in the development of the future of Dundee Corporation,” said Ned Goodman, president and CEO of Dundee Corporation. “We fully expect that The Bank of Nova Scotia will be highly successful in the wealth management industry in their partnership with DundeeWealth and its employees. We wish all of them continued success in the management of DundeeWealth.”

AGF closes Acuity dealAlso closing today was AGF Management’s acquisition of Acuity Funds. The deal boosts AGF’s assets under management to nearly $52 billion, positioning the company as one of the last major independent Canadian mutual fund managers.

AGF’s retail funds and pooled fund assets have risen from $23 billion to $27 billion, while its institutional and high net worth assets have climbed from $21 billion to $25 billion.

“This acquisition gives us greater scale as we continue to provide excellence in money management to meet the needs of a diverse range of clients in both the retail and institutional markets,” said Blake C. Goldring, chairman and CEO of AGF. “The addition of Acuity enhances our investment management capabilities and builds out our product line up allowing us to offer investors an even broader range of investment styles and solutions for every market cycle.”

Acuity brings to the table a strong reputation for socially responsible investing, which could help AGF on the institutional side, where sustainable investing enjoys a slightly higher profile.

AGF says the Acuity portfolio management team remains in place, and will be offered “long-term incentives to focus on delivering performance for investors.” Acuity’s former president and CEO Ian O. Ihnatowycz will join the board of directors at AGF.

“As we worked towards this closing, AGF reinforced our shared values of independence, integrity and innovation,” he says. “We look forward to contributing to the continued growth and success of AGF and remain committed to delivering value for all stakeholders.”