Fiera Capital Corp. has agreed to acquire Ontario-based investment management firm CGOV Asset Management, which has approximately C$5.3 billion in assets under management as of Dec. 31, 2017.
Post acquisition, CGOV partners and key employees will join Fiera Capital, with Ted Ecclestone set to lead Fiera Capital's Canadian private wealth team.
Under the terms of an agreement, an aggregate amount of C$114.2 million will be paid at the time of closing of the deal, subject to various adjustments. The deal consideration will be paid 42% in cash and 58% in class A subordinate voting shares of Fiera Capital.
Approximately 16.7% of the Fiera Capital class A shares placed in escrow will be released after a five-year period only if the company retains at least 80% of institutional assets under management of CGOV after a four-year period following closing.
The transaction is expected to close in the second quarter of 2018, subject to regulatory approvals, including the approval of the Toronto Stock Exchange. The acquisition is expected to be slightly accretive to adjusted EPS within the first full year after closing.
On the closing date of the transaction, the seller will grant an option to Fiera Capital LP to purchase the Fiera class A shares at their market value in consideration for units of Fiera Capital LP Such purchase would be exempted from applicable takeover bid requirements under the private agreement exemption. Fiera Capital LP currently holds 495,629 Fiera class A shares and 19.4 million class B special voting shares of Fiera Capital, representing, in the aggregate, 22.07% of all issued and outstanding shares of Fiera Capital.