(September 21 – 11:45 ET) – IPC Financial Network Inc. has set a date for its shareholder meeting to consider its proposed deal with ING Canada Inc.

At the meeting, shareholders will be asked to consider a strategic alliance with ING Canada. The deal will see IPC acquire AFP Financial Holdings Inc. in exchange for 11.2 million shares of IPC; the issuance to ING Canada of a $7.5 million unsecured promissory note and warrants to acquire 2.5 million shares of IPC for $7.5 million; and a $25 million credit facility by ING Canada.

The deal also includes an ongoing strategic business alliance between IPC and ING Canada; and certain corporate governance and post-closing shareholder arrangements, including the granting of pre-emptive rights to ING Canada and IPC shareholders, Almasa Capital Inc. and Lawrence & Co. The deal is scheduled to close in the last two weeks of October or early November.

As part of the arrangement, IPC and ING Canada have agreed to issue 4.5 million IPC shares to mutual fund representatives associated with AFP to buy their books of business on terms similar to those that are applicable to IPC reps.

In exchange for IPC stock, the firm receives a rep’s “book”, a percentage of their annual gross dealer commission and a two-year non-compete, non-solicit agreement. These shares are escrowed and released in even portions over three years.

IPC says talks with ING began way back in November 1999. The parties entered a confidentiality agreement on January 31, but didn’t enter more serious discussions until the end of June. Over the next few months the firms conducted due diligence and on August 3 settled a term sheet for negotiating the definitive terms of the transaction. On August 16, ING Canada advanced a $7.5 million secured bridge loan to IPC to repay outstanding secured indebtedness of the Company. On closing, the loan will be replaced with the $7.5 million cash investment by ING Canada.

After the deal, IPC will have 900 planners with $7 billion under management. The shareholders meeting is scheduled for October 16 at 10:00 ET at the Wyndham Bristol Place Hotel, Toronto.
-IE Staff