Bank of Montreal has acquired Guardian Group of Funds Ltd. from Guardian Capital Group Ltd. The deal is worth $180 million.

GGOF will continue to operate as an independent line of business, with the same management group in place, the bank stated.

“This is a strategic transaction that gives us an excellent platform to continue to grow our mutual fund business, with the addition of an important new distribution capability through the advisor channel,” William Downe, deputy chair, Bank of Montreal, stated. “Mutual funds are a growth area in which we recognize the need to continually expand our presence and reach. And we plan to get even bigger.”

“Our strategy is very clear – to aggressively extend our wealth management lines of business, products and services by adding scale and depth in an increasingly global investment environment,” said Downe.

“With approximately 65% of mutual fund assets in Canada accessed through the investment advisor and financial planner network, Guardian gives us significant entry into this extremely important channel.” said Gilles Ouellette, president and CEO, BMO Private Client Group.

Following the acquisition, BMO will reorganize its mutual fund operations to bring its fund families together under common management. According to the bank, Barry Cooper, chairman and CEO of Jones Heward Investment Counsel Inc., a member of the Bank of Montreal Group of Companies, will assume the additional responsibility as head of mutual fund investments.

The GGOF acquisition, with $2 billion in assets under management, will increase total fund assets under management to approximately $30 billion. The bank’s fund families include BMO Mutual Funds, Harris Insight Funds, BMO Nesbitt Burns Funds, Jones Heward Funds, Monogram.

The acquisition of the Guardian family of funds is the fifth acquisition by BMO Private Client group in less than two years. It follows the purchase of two U.S. direct brokerages, as well as two private banking operations in Florida and Arizona through The Harris, the wealth management arm of Bank of Montreal’s U.S. subsidiary, Harris Bank.

The transaction, which is valued at $180 million, will be funded by the issuance of 4,960,140 BMO common shares from treasury in exchange for all outstanding shares of GGOF. The BMO shares were valued at $36.2893.

According to the bank, this initiative is expected to have a dilution impact on cash EPS of less than 1% in the first year. The bank’s EPS growth objectives remain unchanged.

The deal is subject to regulatory and Guardian Capital Group Ltd. shareholder approval and is expected to be completed by mid-summer 2001.