Financial Horizons Inc., a mid-sized managing general agency based in Kitchener, Ont., has acquired Force financière Excel, a Quebec-based MGA that services 1,800 brokers in the region.

With the acquisition, Financial Horizons will have $3.5 billion in segregated fund assets, $220 million of in force life insurance policies and will service more than 4,000 brokers across the country.

“It will make us the largest MGA in Canada in terms of number of brokers, as well as other key areas,” says John Hamilton, founder and CEO of Financial Horizons.

Force financière Excel is now a part of Financial Horizons’ Quebec division, with James McMahon, former owner and president of Force financière Excel, as its president. The cost of the acquisition was not disclosed.

McMahon sold his 100% equity stake in Force financière Excel for cash and shares in Financial Horizon’s parent company, Granite Global Solutions, a Toronto-based venture capital firm that is a subsidiary of San Francisco, Calif.-based investment banking firm Genstar Capital LLC.

As for Quebec brokers, it will be business as usual in terms of paperwork and compliance procedures, says Hamilton. “We acquired this MGA because it already has a standard of compliance and sales procedures in place.”

The move is further evidence of consolidation in the MGA channel as brokers demand MGAs to supply a wider product shelf and insurers looks for MGAs with scale. Recently, Vancouver-based Worldsource Insurance Network Inc., a subsidiary of Toronto-based Guardian Capital Group Ltd., merged with Mississauga, Ont.-based IDC Financial Inc. to become Markham, Ont.-based IDCWIN Inc.

“Consolidation has been the fallout of increased regulation and business costs in the independent channel,” says Paul Brown, president of Toronto-based Canadian Association of Life Independent Brokerage Agencies.

Force financière Excel brokers can expect to see more support services, says Hamilton, adding that they will have access to financial planning and estate planning support through the Financial Horizons service platform.

“The transactions is all about making things easier for today’s broker. We only want to add to their existing service platform,” adds Hamilton, who says the deal is the first of several planned acquisitions by Financial Horizons. He declined to elaborate the other potential acquisitions.