IPC Financial Network Inc. killed its proposed merger with Dundee Wealth Management Inc. because the deal was taking too long to complete.

In its Management’s Discussion and Analysis for the third quarter, the firm said it has rededicated itself to a finding a strategy to succeed on its own.

IPC terminated its transaction with Dundee Wealth Management on May 2. In the Q3 report, IPC said “While this transaction appeared good for both companies, management believed that the continuing delays were not in the best interest of IPC and its advisors and, thus, terminated the transaction.”

The firm’s management suggested that it had spent too much time looking at deals and must now get back to business. “Our negotiations over the last year proved very distracting and it is time to get back to our business plan,” it said.

IPC will be undertaking a restructuring plan that will see the majority of its operations consolidated at its Mississauga, Ont. location, as well as the streamlining of some senior management positions. It firm said that these changes have already started and should be mostly complete by the end of the fourth quarter.

Once the restructuring is completed, IPC said it will focus on generating more revenue through the continuing gain of wallet share with clients.


During its third quarter ended May 30, the company took a $6.2 million restructuring charge “mainly for costs related to the Dundee transaction and the restructuring of our share capital”. Most of the costs, $4.9 million, were for the capital reorganization. The remaining costs of $1.3 million were for the writeoff of assets related to prior acquisitions, and other costs related to the proposed transaction with Dundee.

For the nine months ended May 31, restructuring costs of $11.4 million were expensed for severances, writeoff of assets related to prior acquisitions, plus other costs related to the Dundee transaction. Also included in restructuring costs is a $2 million provision for potential liabilities from “certain irregularities” at the branch office in Montreal.

IPC said that it has engaged legal counsel and forensic investigators to assist in the investigation of these irregularities and has advised the Investment Dealers Association, the Quebec Securities Commission and other regulatory and police authorities.

The IDA and Mutual Fund Dealers Association are jointly overseeing the investigation. Meanwhile, the former principals of KPLV Financial Planning Inc., KPLV Securities Inc., and KPLV Insurance Inc. have filed legal claims against IPC for breach of contract and damage to their respective reputations.

IPC said it will be making further provisions for severance and other restructuring costs in the fourth quarter. It suggests that the resulting savings are expected to be “substantial” and should be realized in its first quarter of fiscal 2004.