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CI Funds buys Assante, Synergy Asset Management Inc. and Skylon Capital Corp

Discussion in 'TRIBE Main Forum' started by Chris, Aug 22, 2003.

  1. Chris

    Chris Well-Known TRIBEr

    Not sure what this means for my department. We shall see. Overall I think our reputation will carry us forward and largely be left alone as a business unit. Still there is a lot of employees that will be let go. A good day for some, bad day for others.

    CI buys Assante Canada, Synergy Asset Management

    Will operate Assante Canada as a separate entity

    Friday, August 22, 2003

    By IE Staff


    CI Fund Management Inc. announced two major acquisitions Friday, which will position it as the second-largest fund company in Canada. The firm is acquiring the Canadian operations of Assante Corp., as well as Synergy Asset Management Inc.

    CI is paying for $846 million in cash and common shares of CI for Assante's Canadian operations, which consist of an investment management business with $7 billion in assets under management and one of the country's largest networks of financial advisors, with 1,000 advisers administering $17 billion in assets.

    Assante's U.S. businesses are going to be spun off. They are not included in this transaction.

    "In combination with our acquisition of Synergy Asset Management Inc. and Skylon Capital Corp., this transaction will transform CI, making it Canada's second-largest fund company and giving it a significant presence in the business of providing financial advice directly to Canadians," said Bill Holland, CI's president and CEO, in a news release.

    CI plans to operate Assante Canada as a separate entity that will continue to provide the wide range of products and services now offered by Assante advisers. "Assante Canada's clients and their advisers will benefit from CI's financial strength and its expertise in areas such as portfolio management, administration and technology," Holland said.

    CI will issue 42.623 million CI common shares, worth approximately $571 million (based on yesterday's closing price of $13.40), and pay $275 million in cash for Assante Canada. The transaction values Assante Canada at $8.25 per Assante share.

    Major shareholders of Assante representing 32% of the firm's shares have committed to vote their shares in favour of CI's offer. In addition, CI already owns 9.1% of Assante shares.

    Sun Life Financial Inc. has agreed to support the transaction by purchasing approximately 20.1 million common shares of CI for $258.3 million. As a result, Sun Life will maintain its ownership interest in CI at 34%.

    The transaction, which is subject to approval by regulators and Assante shareholders, is expected to close prior to the end of the year.

    CI is also buying Synergy Asset Management Inc. for approximately $116 million. CI has agreed to issue 1,655,874 common shares of CI and pay $94.3 million cash for Synergy. Synergy has assets of approximately $1.4 billion in 24 funds.

    Sun Life Financial Inc. has agreed to support the transaction by purchasing 860,652 shares of CI for approximately $10.8 million. On closing, this will maintain Sun Life's ownership interest in CI at 34%.

    These two deals are coming one day after CI announced the takeover of Skylawn Capital Corporation. The total value of the three deals is estimated at $1 billion.

    "As well as maintaining consistent performance, Synergy has had positive net sales every single month since inception, has developed a strong rapport with advisers and investors, and has successfully developed a well-recognized brand over the past five years," said Holland.

    "Synergy is an excellent fit with CI and we plan to offer a Synergy family of funds as part of our lineup," Holland added.

    "In addition to merging our two outstanding fund families, another key reason we made this decision was that we felt Joe Canavan has the proven leadership skills and expertise to join CI in an executive capacity, overseeing the company's distribution strategy."

    Canavan is the founder, president and CEO of Synergy.

    The acquisition of Synergy, which will be debt-free on closing and has approximately $55 million in available tax losses due to cash financing of deferred sales commissions, will be immediately accretive to CI's earnings, cash flow and EBITDA (earnings before interest, taxes, depreciation and amortization).

    The transaction, which is subject to regulatory approval, is expected to close in October 2003 following the required notification to unitholders of the Synergy Mutual Funds.

    The Synergy and Assante transactions will increase CI's mutual and segregated funds under management by 28% to $38.5 billion. CI has another $5.3 billion in assets in institutional accounts, labour-sponsored and other funds that generate revenue for the company.

    "The growth in assets through these transactions will solidify our position at the very top tier of Canadian fund companies and allow us to take advantage of economies of scale, to the benefit of investors in the funds and CI shareholders," Holland said.
  2. Hi i'm God

    Hi i'm God TRIBE Member

    Didnt Assante buy someones else a couple years back?
  3. Chris

    Chris Well-Known TRIBEr

    Assante bought a number of smaller fish over the years, I think we have acquired at least 14 different mutual fund dealers. It was only a matter of time before one of the big fish took us out.
  4. lok

    lok TRIBE Member

    ChrisD, if you need some work, Im looking for a personal trainer/house boy
  5. Chris

    Chris Well-Known TRIBEr

    I think we will be okay, but with these things you never know, we shall see

  6. Jennika

    Jennika TRIBE Member

    didn't they buy Trimark? or maybe I'm wayyy off base
  7. Chris

    Chris Well-Known TRIBEr

  8. Boo

    Boo TRIBE Member

    A place I used to work for was bought out a few years back. When they announced it they said that all employees that stay with the company until the aquisition date will recieve a 35% bonus on their annual salary :D

    Best part was that I had only been at the company 1 week before the announcement! I left 1 month after the merger for a better job, bonus in hand ;)
  9. Hopefully my mortal enemy there is gonna get the boot
  10. Hi i'm God

    Hi i'm God TRIBE Member

    Nope! I used to work for Trimark... we Mearged with AIM Funds. Not a bad merger, got increases better health plans matching rrsp's and all that but then when the buissness slowed I was laid off with 500 others! Very poor managment their, some how all the VP's where like the age of 25 and canned all the older people that really knew what they were doing.
  11. Chris

    Chris Well-Known TRIBEr

    Who is it James? Do I know them?
  12. The Magical White Isle

    The Magical White Isle TRIBE Member

    Skylon is one of our best clients. We've led all of their strucutred products (about $600 + million, excluding labor sponsored funds) that have come to market since the principals of the company sold Triax and started Skylon.

    Chris, do you work for Assante? One of my good buddy's parent's sits on the board of directors over there. We were trying to get the mandate to purchase Assante for one of our clients in a reverse takeover. Unfortunately, Assante didn't want to merge with our client, so the deal fell by the wasteside. Marty wants to focus his time anyways on the US business. I am sure he is cashing out nicely though. Assante didn't have much more room to grow AUM, as most of their growth as come from transfering AUA to AUM.


  13. Chris

    Chris Well-Known TRIBEr

    The Magical White Isle,
    yeah I do. Yeah not much room left on our conversion of AUA to AUM left, some advisors still have quite the room though. Still our only out was to either get more clients, expensive and difficult. Or get acquired or be acquired. Being bought out has been a long time coming. Hopefully now we can get some momentum back.

    You work at TD Securities right?
  14. Cho

    Cho TRIBE Member

    Mine too!
  15. I found out mine did. :D
  16. Gugs

    Gugs TRIBE Member

    That's nuts, I've known Assante's CEO's son for years now, never knew it was worth that much
  17. Cho

    Cho TRIBE Member

    I should get on this!

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