Financial institution iA purchasing RF Capital Group for a sum of $597 million in a transaction deal
In a significant move to expand its presence in the Canadian wealth management industry, particularly in the high-net-worth segment, iA Financial Group has announced the acquisition of RF Capital Group. The deal, worth $597 million, will add more than $40 billion in assets under administration (AUA) and 189 advisors to iA’s existing network, positioning iA Wealth’s total AUA at about $175 billion.
As part of the strategic move, CIBC Capital Markets is acting as the exclusive financial advisor to RF Capital, while Goodmans is acting as its legal counsel. National Bank Financial Inc. is acting as financial advisor to iA, with McCarthy Tétrault serving as its legal counsel.
The acquisition reinforces iA Wealth's position as a leading non-bank wealth platform in Canada, offering additional reach in the independent full-service brokerage channel. Dave Kelly, President and CEO of RF Capital, endorsed the transaction, stating it brings excellent value to all stakeholders and provides a great home for advisors, employees, and clients to thrive.
iA Financial Group plans to keep RF Capital’s Richardson Wealth brand distinct within its portfolio alongside its existing Investia and iA Wealth channels. This preserves brand uniqueness and advisor independence, offering diverse business models tailored to advisor preferences.
The acquisition is expected to be neutral on core earnings in the first year but will increase core earnings per share by at least $0.15 in the second year, reflecting expected synergies and financial benefits from scale advantages in pricing, distribution, digital, and brand strength.
The impact on the Canadian wealth management industry is substantial. The acquisition strengthens a major independent player against banks dominating the wealth advisory market, enhancing competition and offering clients and advisors more independent and client-centric choices. By integrating complementary distribution models and expanding reach in the full-service brokerage segment, iA Financial Group enhances market scale, potentially influencing pricing dynamics and innovation within Canadian wealth management.
Don Wright, Chair of the RF Capital Board of Directors, fully supports the decision to accept iA's offer, stating it is the best path forward to unlocking value for all stakeholders. Stephan Bourbonnais, Executive Vice-President of Wealth Management at RF Capital, expressed enthusiasm about the acquisition, citing opportunities in technology, product innovation, and operational scale.
Stikeman Elliott is acting as legal counsel to Richardson Financial Group Limited. The advisors will remain dedicated to delivering trusted, personalized advice to their clients, operating independently under the Richardson Wealth brand, with the financial strength and stability of iA Financial Group backing them. Denis Ricard, President and CEO of iA Financial Group, affirmed the company's commitment to the value of advice by empowering advisors with best-in-class tools and preserving their independence.
In a definitive agreement, iA Financial Group will acquire all of RF Capital's common shares for $20 per share in cash. The transaction is subject to customary closing conditions, including regulatory approvals and the approval of RF Capital shareholders. If all conditions are met, the transaction is expected to close in the second half of 2023.
- The acquisition of RF Capital Group by iA Financial Group, with a focus on investing in the high-net-worth segment of the Canadian wealth management industry, will allow for increased financial benefits through synergies and scale advantages in pricing, distribution, digital, and brand strength.
- As iA Financial Group continues to grow its business through strategic acquisitions, such as the purchase of RF Capital, it aims to expand its reach in the full-service brokerage channel and foster an independent and client-centric environment that supports the growth of advisors and their clients.
