Transaction will strengthen Desjardins in life insurance and wealth management sectors and accelerate its growth strategy for the broader Canadian market. Desjardins is committed to maintaining the independence of advisors and intends to retain the management and employees of the acquired companies.

Canadian ICMIF member Desjardins Group today announced that it has entered into definitive agreements to acquire the life insurance, mutual fund and investment distribution networks of Guardian Capital Group Ltd. Specifically, Desjardins will acquire:

• IDC Worldsource Insurance Network Inc. (IDC), one of the largest life insurance managing general agencies (MGA) in Canada;
• Worldsource Financial Management Inc. (WFM), a mutual fund dealer; and
• Worldsource Securities Inc. (WSI), a full-service investment dealer.

IDC, WFM and WSI serve more than 5,000 independent advisors in the Canadian insurance and financial advice markets.

The acquisition will position Desjardins as a leader in the independent distribution of life insurance and retail investment products in Canada, with more than CAD 2 billion in life insurance premiums in force and CAD 43 billion in combined assets under administration in mutual funds, segregated funds and securities, as at 30 June 2022.

Following the closing of the transaction, Desjardins plans to operate the acquired companies as stand-alone entities, and expects them to continue being led by the current teams of management and employees. The companies will continue supporting advisors’ core beliefs to maintain independence with respect to open architecture for products and solutions.

“This acquisition strengthens Desjardins in the important life insurance and wealth management sectors across Canada,” said Guy Cormier, President and CEO of Desjardins Group. “On the insurance side, it extends our market reach and positions us as a leader in life insurance independent distribution in Canada. On the financial advisory side, the mutual fund and securities dealers will enhance and strengthen our distribution of retail investment products. With this added bench strength, Desjardins will be able to serve more Canadians and achieve critical mass to generate the financial flexibility to innovate and invest to better meet the needs of our members, clients and advisors.

“All three acquired companies align with Desjardins’ values and commitment to win the trust of members and clients and will continue building on their outstanding growth serving clients through the independent advisor channel. We look forward to welcoming the leaders, employees and advisors and supporting their continued impressive success going forward,” he added.

George Mavroudis, President and CEO of Guardian, said, “We are proud of the quality of wealth businesses we have built. Our success has been made possible by remaining patient and building long standing trusted relationships between advisors and our company. This was all made possible due to the strong leadership and collaborative efforts of our dedicated executive team, employees and advisors”. He further noted, “At the same time, we take great comfort in having Desjardins succeed us as owners of these businesses. Desjardins has the vision, resources and long-term commitment to offer the employees and advisors an environment to thrive and reach even greater levels of success.”

He added that “This transaction unlocks meaningful value for Guardian’s shareholders, while simultaneously streamlining its operations to focus on its core investment management business. We look forward to continuing to build best in class investment solutions for investors and growing our diverse investment management business across all client segments, including institutional, retail, and private wealth.”

The purchase price under the Purchase Agreements is CAD 750 million, subject to customary purchase price adjustments, a portion of which will be distributed to minority shareholders of IDC. In addition to the proceeds expected to be received under the transaction, Guardian has a portfolio valued at CAD 648 million, as at its last quarter end of 30 September 2022.

As a result of this acquisition, Desjardins will accelerate its growth strategy for the broader Canadian market, a key focus for the organisation in recent years. The acquisition of State Farm’s Canadian operations in 2015 positioned Desjardins as the second largest P&C (non-life) insurer in the country. More recently, the partnership with Canada’s five provincial credit union centrals and CUMIS in 2017 created Aviso Wealth, which administers and manages over CAD 100 billion in assets and is now one of the largest independent wealth management firms in the country.

The transaction is expected to close in the first quarter of 2023 and is subject to customary closing conditions, including regulatory approvals.