Laurentian Bank subsidiary acquires AGF Trust

B2B Trust, a subsidiary of Laurentian Bank, will acquire AGF Trust Company in a cash transaction of approximately $242 million. The deal will close August 2012.

The agreement also includes a contingent consideration of $20 million over five years. As well, B2B Trust will require AGF Trust, immediately after closing, to repay subordinated indebtedness owed to and redeem preferred shares held by AGF Management Limited, for $173.5 million.

Read: B2B Trust teams up with La Capitale

The integration of operations is planned for 2013. This transaction is expected to increase the bank’s net income by approximately $28 million to $30 million annually as of 2014.

This sale will provide AGF with approximately $415 million in cash proceeds—$242 million for the total equity of AGF Trust, repayment of $109.5 million subordinated debt, and $64 million in preferred shares from AGF Trust to AGF Management Limited.

Read: AGF, Eaton Vance launch two new funds

In other Laurentian news, the bank reported net income growth of $33.9 million in Q2 2012, compared with $31.0 million for the same period last year.

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