MONTREAL, March 22, 2019 /PRNewswire/ --
Transaction Complements Existing
Suite of Private Alternative Investment Strategies, Adding Over
$3 Billion in Aum And Committed
Capital
- Transforms Fiera Private Lending into a leading pan-Canadian
non-bank private lending platform
- Accelerates Fiera Properties growth with a complementary niche
offering focused on industrial property
- Transaction enterprise value of $64
million
- Accretive to Fiera Capital's 2019 EPS and Adjusted EPS
Fiera Capital Corporation ("Fiera Capital" or the "Firm") (TSX:
FSZ) announced today that it has entered into a definitive
agreement with Integrated Asset Management Corp. ("IAM") (TSX: IAM)
(the "Agreement") under which it will acquire all of the
outstanding common shares of IAM ("IAM Shares") pursuant to a
statutory plan of arrangement under the Business Corporations
Act (Ontario) (the
"Transaction"). IAM's private debt investment team will be
incorporated within Fiera Private Lending and the industrial real
estate team will be joining Fiera Properties, expanding the depth
of strategies offered within Fiera Capital's Private Alternative
Investments platform. The transaction received the unanimous
support of the board of directors of both companies, and IAM
shareholders holding 62% of issued and outstanding IAM Shares have
entered into voting and support agreements in favour of the
Transaction, as further described below.
The Transaction is expected to close in the second quarter of
2019.
"This acquisition further strengthens and diversifies Fiera
Capital's private alternatives lending platform, bringing
significant capabilities in private debt in addition to expanding
our real estate platform," said John Valentini, President and CEO, Private
Alternative Investments, Fiera Capital. "We are excited to offer
a leading private lending platform that is truly national and
further develop our real estate investment strategies, while
simultaneously driving the growth and distribution of an enhanced
suite of private markets strategies."
"With this acquisition, Fiera Private Lending becomes one of
the leading pan-Canadian non-bank lending platforms in the
country," said Jean
Gamache, President, Fiera Private Lending. "In addition
to an experienced team and a long track record of performance, IAM
brings a complementary product offering with its long-term loans,
strengthening our existing portfolio and providing
Fiera Capital investors with even more opportunities for
diversification."
"We are acquiring a real estate business with a unique
investment strategy that is complementary to Fiera Properties'
existing business. For our clients, this means further investment
opportunities into an asset class with stable and recurring
cash flows and a unique level portfolio diversification," said
Peter Cuthbert, President, Fiera
Properties.
"Joining forces with Fiera Capital creates an opportunity for
IAM shareholders to realize immediate value and liquidity as
well as the opportunity to participate in a larger combined company
well-positioned for future growth. We believe this is also a great
opportunity for IAM employees to join the team at Fiera
Capital," said John
Robertson, President and CEO of IAM.
Transaction Details
Total consideration under the Transaction, or equity value, is
$74 million, which represents total
IAM enterprise value of $64 million
and $10 million of adjusted cash on
hand. Total consideration paid by Fiera Capital will consist
of $55.5 million in cash and
$18.5 million of Fiera Capital
Class A subordinate voting shares ("Fiera Capital Shares").
IAM shareholders will also receive additional contingent
consideration in the form of contingent value rights ("CVRs"), as
further described below.
In addition, to the extent that IAM's closing adjusted cash
balance (as calculated under the Agreement) exceeds
$10 million (after Transaction costs, including severance,
accrued bonuses, change of control payments and other amounts and
costs related to the Transaction and IAM head office employee
termination at closing), IAM will be entitled to declare and pay
the excess amount as a special dividend to IAM shareholders of
record immediately prior to closing of the Transaction. It is
possible that no special dividend will be paid.
Under the terms of the Transaction, IAM shareholders may elect
to receive, for each IAM Share held (i) $2.576 in cash, subject to proration such that
the aggregate cash paid under the Transaction will not exceed
$55.5 million, (ii) a number of Fiera
Capital Shares (or a fraction of a Fiera Capital Share) equal to
$2.576 divided by the volume-weighted
average trading price of the Fiera Capital Shares on the Toronto
Stock Exchange (the "TSX") over the five trading days immediately
preceding the business day immediately preceding the effective date
of the Transaction (the "5-Day VWAP"), subject to proration such
that the aggregate number of Fiera Capital Shares issued under the
Transaction will not exceed $18.5
million in value, or (iii) $1.932 in cash and a number of Fiera Capital
Shares (or a fraction of a Fiera Capital Share) equal to
$0.644 divided by the 5-Day VWAP.
In addition, IAM shareholders will receive contingent
consideration in the form of one CVR for each IAM Share held. The
CVRs represent the contingent right of their holders to receive
their pro rata portion of the aggregate cash payments from Fiera
Capital which are based on the incentive fees (net of employee
bonuses, certain taxes and expenses) (the "Net Incentive Fees") to
be received by IAM affiliates in connection with the management of
two real estate funds, one of which is currently scheduled to
mature in 2021 and the other one in 2024. The amount that may
become payable to CVR holders at a future date is uncertain and
will depend on a number of factors, including the fair market value
of the underlying real estate at the time any Net Incentive Fee is
calculated. It is not possible to estimate what payment, if any,
may be made on the CVRs and it is possible that no payment will
ultimately be made on the CVRs.
Fiera Capital has sufficient cash on hand and available under
existing credit arrangements to finance the cash portion of the
Transaction consideration.
Transaction Approvals and Special Meeting of IAM
Shareholders
The Transaction will be implemented by way of a court-approved
plan of arrangement under the Business Corporations Act
(Ontario) and will be subject to
the approval of 66 2/3% of the votes cast by IAM shareholders, and
a simple majority of votes cast by minority holders of IAM Shares
after excluding votes of any persons required under Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions, each at a special meeting to be scheduled
to consider the Transaction (the "Special Meeting"). The two
largest IAM shareholders, who collectively hold approximately 52.6%
of the issued and outstanding IAM Shares (both of whom will be
eligible to vote on the majority of the minority approval noted
above), have entered into hard lock-up agreements, agreeing to vote
their IAM Shares in favour of the Transaction for a period of
6 months following today's date. Such hard lock-up agreements
may not be terminated by the Significant Shareholders in the event
of a superior proposal. Furthermore, certain other directors and
senior officers of IAM, who hold collectively approximately 9.4% of
the issued and outstanding IAM Shares, have entered into voting and
support agreements in their capacities as shareholders, agreeing to
vote their IAM Shares in favour of the proposed Transaction.
In addition to IAM shareholder and court approvals, the
Transaction is subject to regulatory approvals, IAM's adjusted cash
balance as calculated under the Agreement being at least
$10 million at the effective date and
closing conditions customary in transactions of this nature,
including approval by the TSX for the listing of Fiera Capital
Shares to be issued. The Agreement provides for customary deal
protection provisions, including non-solicitation covenants and a
right to match superior proposals in favour of Fiera Capital. The
Agreement includes a termination fee of $2.5
million, payable by IAM to Fiera Capital in certain
circumstances.
It is anticipated that the Special Meeting will be held in
May 2019.
No Offer or Solicitation
This announcement is for informational purposes only and does
not constitute an offer to purchase or a solicitation of an offer
to sell IAM Shares or an offer to sell or a solicitation of an
offer to buy Fiera Capital Shares.
None of the securities to be issued pursuant to the Agreement
have been or will be registered under the United States Securities
Act of 1933, as amended (the "US Securities Act"), or any state
securities laws, and any securities issued in the Transaction are
anticipated to be issued in reliance upon available exemptions from
such registration requirements pursuant to Section 3(a)(10) of the
US Securities Act and applicable exemptions under state securities
laws.
Non-IFRS Measures
This press release makes reference to adjusted earnings per
share of Fiera Capital ("Adjusted EPS"), which is a non-IFRS
measure. Adjusted EPS is not a recognized measure under IFRS, does
not have a standardized meaning under IFRS and is unlikely to be
comparable to similar measures used by other companies. The
rationale for the use of non-IFRS measures is presented in Fiera
Capital's Management's Discussion and Analysis (MD&A), which is
available on SEDAR at http://www.sedar.com.
Forward-Looking Information
Certain information in this news release constitutes
forward-looking information for the purposes of applicable
securities laws. Forward-looking information and statements can
generally be identified by the use of forward-looking terminology
such as "anticipate", "estimate", "may", "will", "expect",
"believe", "plan" or variations of such words and phrases, or by
the use of words or phrases which state that certain actions,
events or results "may", "could", "would", or "might" occur or be
achieved. All statements included in this news release, other than
statements of historical facts, are forward-looking statements or
information. Forward-looking statements or information in this news
release relate to, among other things, the anticipated
completion of the Transaction and the timing for such completion;
the potential impact of the Transaction on the combined entity's
future operations; the position of the combined company for future
growth, the accretion resulting from the Transaction in 2019; the
suitability of the Transaction for Fiera Capital and IAM; the
effect of the Transaction on IAM stakeholders; the possible payment
of a special dividend (and the amount and timing thereof); the
amount of the Net Incentive Fees (if any) that may be received by
IAM or its affiliates and the potential contingent payments
pursuant to the CVRs (and the amount and timing thereof); the
Special Meeting and anticipated timing for holding the Special
Meeting; the receipt of court, shareholder and regulatory approvals
required for the Transaction; Fiera Capital's intention for IAM's
business and employees after closing; and the listing of the Fiera
Capital Shares issuable pursuant to the Transaction on the TSX.
These forward-looking statements are not facts or guarantees of
future performance, but only reflections of estimates and
expectations of Fiera Capital's management and involve a number of
risks, uncertainties, and assumptions that, while considered
reasonable by Fiera Capital, are inherently subject to significant
operational, business, economic, regulatory and other uncertainties
and contingencies.
With respect to Fiera Capital's management's expectations
regarding accretion resulting from this Transaction post-closing,
financial performance is based on information available to
management and certain assumptions, including the accuracy of IAM
financial statements, the level of IAM client assets under
management retained by Fiera Capital following the Transaction, as
well as assumptions regarding the growth in IAM assets under
management transferred to Fiera Capital and realization of
synergies. Actual results could differ depending on a number
of factors, including the ability to retain key personnel following
the acquisition, the ability to retain clients and assets under
management following the acquisition and general market
conditions.
Readers are further cautioned that forward-looking statements
and information involve known and unknown risks, uncertainties and
other factors that may cause actual results and developments to
differ materially from those expressed or implied by such
forward-looking statements or information contained in this news
release and Fiera Capital has made assumptions and estimates based
on or related to many of these factors. Among the key factors that
could cause actual results to differ materially from those
projected in the forward-looking statements and information are the
following: the ability to consummate the Transaction; the ability
to obtain all required approvals and consents including regulatory,
TSX, shareholder and court approvals or to otherwise fulfill all of
the conditions precedent to the Transaction, in a timely manner, or
at all; IAM not having an adjusted cash balance of at least
$10 million at the effective date for
the Transaction which is a condition to closing; significant
Transaction costs or unknown liabilities; failure to realize the
expected benefits of the Transaction, including the ability to
successfully integrate the operations and employees and realize the
anticipated strategic benefits and operational, competitive and
cost synergies expected to result from the Transaction; the risk
that IAM will not be entitled or able to pay a special dividend;
the risk that no amount will ultimately become payable under the
CVRs; changes in general economic, business and political
conditions, including changes in the financial markets; and changes
in applicable laws. The foregoing list of risks and uncertainties
is not exhaustive.
The forward-looking statements and information contained in this
news release reflect Fiera Capital's current expectations and
assumptions regarding future events and operating performance and
speak only as of the date of this news release. While these
assumptions and expectations are considered reasonable, a number of
factors could cause the actual results, level of activity,
performance or achievements to be materially different from the
expectations and assumptions of Fiera Capital, including those
discussed in Fiera Capital's public filings available at
http://www.sedar.com and in particular in its most recent annual
information form under "Risk Factors" and in its management's
discussion and analysis for its fiscal year ended
December 31, 2018 under "Risk Factors".
Readers are further cautioned not to place undue reliance on
forward-looking statements or information as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Forward-looking statements and
information contained in this news release are expressly qualified
by this cautionary statement. Except as required by law, Fiera
Capital assumes no obligation to update or revise forward-looking
information to reflect new events, information or
circumstances.
About Fiera Capital Corporation
Fiera Capital Corporation is a global independent asset
management firm with approximately C$136.7
billion in AUM as at December 31,
2018 delivering customized multi-asset solutions across
traditional and alternative asset classes to institutional, retail
and private wealth clients across North
America, Europe and key
markets in Asia. Fiera Capital
strives to be at the forefront of investment-management science and
is passionate about creating sustainable wealth for clients. Fiera
Capital trades under the ticker FSZ on the Toronto Stock Exchange.
http://www.fieracapital.com
In the U.S., asset management services are provided by the
Firm's U.S. affiliates who are investment advisers that are
registered with the U.S. Securities and Exchange Commission (SEC).
Further, the Firm's affiliates Fiera Capital (UK) Limited and Fiera
Capital (IOM) Limited are both registered as investment advisers
with the SEC. Fiera Capital (UK) Limited is authorized and
regulated by the Financial Conduct Authority in the United Kingdom and Fiera Capital (IOM) Limited
is licensed by the Isle of Man Financial Services Authority.
Registration with the SEC does not imply a certain level of skill
or training.
Additional information about Fiera Capital Corporation,
including the Firm's annual information form, is available on SEDAR
at http://www.sedar.com
About Integrated Asset Management Corp.
IAM is one of Canada's leading
alternative asset management companies with approximately
$3.1 billion in assets and committed
capital under management in private debt, infrastructure debt and
real estate as of February 28, 2019.
For more information, please visit:
http://www.iamgroup.ca. IAM's common shares trade on the TSX
under the ticker symbol IAM.
Fiera Capital Corporation
Mariem Elsayed, Director
Investor Relations and Public Affairs
Fiera Capital Corporation
514-954-6619
melsayed@fieracapital.com
Media contacts:
North America
Kaitlyn Nightingale
Edelman
+1-416-849-3147
kaitlyn.nightingale@edelman.com
United Kingdom &
Europe
Emily Cullen
Smithfield
+44-20-3047-2530
ecullen@smithfieldgroup.com