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Canada's AGF Signs Deal To Buy Fund Firm, Consolidation Trend Rolls On

AGF Management, the Canada-based investment firm, continued a trend of consolidation in the country’s sector by announcing it has signed a cash and stock deal to buy all of Acuity Funds Ltd and Acuity Investment Management. The deal boosts AGF’s assets under management to more than C$51 billion (around $50 billion).
The agreement, if approved, comes with a purchase price of $325 million. It is expected to be completed on or about 1 February next year and is subject to an adjustment based on assets at closing, the firm said in a statement yesterday.
The agreement is the latest in a line of merger and acquisitions in Canada’s wealth and asset management sector in recent weeks. Bank of Nova Scotia has agreed to buy the 82 per cent holding of DundeeWealth that it did not already own for C$2.3 billion. A few weeks earlier, Royal Bank of Canada, a firm with a large wealth management arm, has said it will buy BlueBay Asset Management in the UK.
Under the terms of the AGF agreement, Acuity shareholders will receive a combination of 60 per cent cash and 40 per cent AGF Class B Non-Voting shares. A portion of the purchase price will be deferred and is subject to an AUM-based adjustment over three years from closing. This acquisition requires regulatory approval, the statement said.
AGF is one of the largest independent investment management firms in the country; prior to the agreement, it oversaw a total of C$44 billion of AuM. The new asset base will be split almost evenly between retail and institutional assets reflecting AGF's ongoing strategy of diversification and growth. Acuity, a leading Canadian investment management firm, currently manages approximately $7.4 billion for retail, institutional and high net worth investors.