This article was added by the user . TheWorldNews is not responsible for the content of the platform.

Desjardins buying Guardian insurance, fund and investment distribution networks

It says it plans to operate the acquired companies as stand-alone entities.

A Caisse populaire Desjardins sign is seen in Montreal on June 18, 2019.
A Caisse populaire Desjardins sign is seen in Montreal on June 18, 2019. Photo by Paul Chiasson /THE CANADIAN PRESS

Desjardins Group has signed a deal to buy Guardian Capital Group Ltd.’s life insurance, mutual fund and investment distribution networks for $750 million, continuing its expansion outside Quebec.

Desjardins Group chief executive Guy Cormier says the deal positions it as a leader in life insurance independent distribution in Canada and strengthens its distribution of retail investment products.

Sign up to receive daily headline news from the Montreal Gazette, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Under the agreement, Desjardins will acquire IDC Worldsource Insurance Network Inc., mutual fund dealer Worldsource Financial Management Inc. and full-service investment dealer Worldsource Securities Inc.

It says it plans to operate the acquired companies as stand-alone entities, and expects them to continue being led by the current teams of management and employees.

The transaction is expected to close in the first quarter of next year and is subject to customary closing conditions, including regulatory approvals. Current management will remain in place until then.

Guardian Capital Group shareholders reacted positively to the news, with shares closing at $38.20, up 32 per cent, on the Toronto Stock Exchange.

Scotiabank analyst Phil Hardie said the sale of shares will bring significant value for shareholders. The net value of the acquired assets is just under $410 million, he estimated.

Desjardins also sees significant value.

“Since 2015, we have been very clear: in our strategic guidelines, we want to diversify our revenue sources across Canada and expand,” Cormier said in an interview. “This transaction is hyperstrategic because it fits in very well with what we want to do.”

Cormier said Desjardins has 2,000 independent advisors across Canada and is adding 5,000. “They remain independent advisors who will continue to offer a variety of products available to them, but it’s clear that it gives us more of an opportunity to increase our distribution.”

The three divisions have portfolios of $2 billion in life insurance premiums and $43 billion in assets under management as of June 30.

Since acquiring the Canadian activities of State Farm in 2015, Mouvement Desjardins has focused on its expansion strategy outside Quebec. About a third of its revenues come from the rest of Canada.