Canada’s Guardian Capital Group has agreed to be taken private by Desjardins Global Asset Management in a C$1.67 billion ($1.21 billion) all-cash deal, the financial services firm said on Thursday.
The buyout coincides with improving dealmaking sentiment across Wall Street after a lull earlier in the year due to a macroeconomic whiplash from U.S. tariffs.
The Bank of Canada aggressively eased rates by 225 basis points starting in June last year, but since March has paused as it waits to assess the impact of tariffs on the economy and prices.
Desjardin will pay C$68 per share for all class A and common shares of Guardian, representing a premium of 66% and 48% over the last closing price of each class of share.
Investment managers have historically relied on inorganic growth via M&A as a larger client base directly translates into higher fees, which is often tied to assets under management.
The Guardian deal also aligns with the larger preference across markets of financing buyout deals with cash-and-stock due to the narrowing gap between the pre-tax costs of equity and debt.
Guardian will go private after a nearly six-decade run on the Toronto Stock Exchange, during which it grew to manage C$164.1 billion worth of assets. Post deal closing, the combined entity will manage about C$280 billion of client assets.
Guardian provides investment management services to institutional, retail and private clients.
In late 2022, Desjardins had acquired Guardian’s life insurance, mutual fund, and investment distribution networks in a $750 million deal.
BMO Capital Markets advised Guardian on the deal, while Desjardins Capital Markets advised Desjardins.
Source: Reuters.com