(September 18 – 11:15 ET) – ING Canada and IPC Financial Network Inc. say they have reached a definitive agreement on their proposed strategic alliance aimed at creating a leading wealth management organization.
ING Canada will merge the operations of its wealth management unit, AFP Financial Holdings — whose affiliate AFP Wealth Management Inc is a mutual fund distributor — with IPC’s national network of financial planners and advisors. The agreement also calls for IPC to issue a promissory note and warrants to ING in consideration of a $7.5 million investment.
As a result of these transactions, ING will become the largest shareholder of IPC, holding approximately 22%, valued at $31 million. ING will also provide a $25 million credit facility to fund IPC’s working capital requirements and acquisition program.
Following the merger of AFP’s operations, assets under administration by IPC will amount to approximately $7 billion and the number of financial planners and agents under the IPC’s banner will grow to more than 900.
Shareholders of IPC will be asked to approve the transaction at a special meeting to be held in Toronto on October 16, 2000. The transaction is expected to close later this fall pending regulatory approvals.
According to Steve Meehan, CEO of IPC, “this alliance is strengthening IPC’s financial resources and will allow us to pursue aggressively our strategy to consolidate the highly fragmented financial planning industry in Canada. By joining forces with ING, we will also enhance our products and services as well as our ability to attract financial planners”.
As for ING, “the transaction constitutes another step in realizing our goal of becoming a major player in wealth management business in Canada,” said Claude Dussault, president and CEO of ING Canada Brokerage Networks, who will be joining the board of directors of IPC.
-IE Staff