Investors Group acquires IPC

By Doug Watt | February 25, 2004 | Last updated on February 25, 2004
3 min read

(February 25, 2004) Winnipeg-based mutual fund giant Investors Group (IG) is expanding its presence in the financial planning channel. Today it announced plans to acquire IPC Financial Network in a friendly takeover bid valued at close to $100 million.

IG says it will purchase all IPC common shares at a price of $1.95. IPC shares closed at $1.60 on Tuesday.

Under the terms of the deal, a new private holding company — called IPC Holdco — will be created. IG will own 70% to 85% of the new company, while IPC management and advisors will own the remainder. IG expects to have between $88 million and $106 million invested in IPC Holdco when the deal closes in May.

IPC will continue to be operated as an independent firm, managed by the current team, executives from the two companies said in a conference call.

“We really liked what we saw in IPC and what the management group has built,” said IG CEO Jeffrey Orr. “We want to maintain the IPC model and make it more competitive through lower operating costs.”

IG used the same strategy when it took over Mackenzie Financial in 2001, Orr added. “The Mackenzie transaction demonstrated that we understand the differences in business models and that we respect those differences. At the same time, we can achieve benefits for financial advisors and their clients and create value for shareholders.”

Steve Meehan and Chris Reynolds will maintain their respective roles as IPC’s CEO and president. The strategy of equity participation in IPC by management and advisors will also continue.

“We want to maintain the entrepreneurial character of IPC which has been a critical component of its success,” Orr stated.

“We think this transaction is fantastic,” said Meehan. “It not only gives excellent value for our shareholders, but it also puts us in the position where we are now partnering with one of the most successful financial organizations in Canada.”

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  • “It allows us to keep our business intact,” Meehan continued. “I don’t think we could have got a better result.”

    Last year, Dundee Wealth Management’s proposed takeover of IPC fell through due to compliance issues at KPLV, a Montreal firm acquired by IPC in 2001. The dispute is now the subject of a lawsuit but Orr suggested it won’t be an issue this time around. “We’ve been very thorough with our due diligence,” he said. “It was one issue in one office and we’re comfortable with what has been provided for.”

    IPC received a second unsolicited takeover bid last September. The offer was rejected, but Meehan said it prompted IPC to set up a committee to consider further bids, culminating in today’s deal.

    For IPC’s 600 advisors, it will likely be business as usual, says independent fund industry analyst Dan Hallett. “There may be some immediate potential synergies simply in the context of back-office cost savings.”

    From a distribution perspective, Hallett says he doesn’t see IPC reps selling IG funds. “Most advisors at IPC and other similar firms value their independence, regardless of whether or not their parent company has its own products. Hence, any push to sell IG product via IPC’s advisors just won’t fly, in my opinion.”

    But Hallett does see the deal creating potential for IPC’s Counsel Group of Funds, cited today by Orr as one of the reasons IG was interested in IPC. “IG reps have a narrower universe from which to choose. It makes sense to me that IG sees growth and profit potential in combining its distribution network with Counsel,” said Hallett.

    The IPC board has unanimously accepted IG’s offer and has agreed to a break fee of $5 million if the deal fails to go through.

    IPC has $1.2 billion in client assets under management, compared to IG’s $77 billion.

    What do you think of Investors Group’s move? Do you agree that it will be “business as usual” for IPC advisors? Join in the conversation already started in the “Free For All” forum of the Talvest Town Hall on

    Filed by Doug Watt,,, with additional reporting by Steven Lamb


    Doug Watt