Sale will provide AGF with $415 million cash
TORONTO, June 6, 2012 /CNW/ - Following today's announcement of the sale
of AGF Trust Company ("AGF Trust") for approximately $415 million in
total cash proceeds, AGF Management Limited ("AGF") will focus on
growing its global investment management business. The $415 million in
total sale proceeds is comprised of $242 million for the total equity
of AGF Trust (subject to changes in the equity value between now and
closing) and repayment of the $109.5 million subordinated debt and the
$64 million preferred share from AGF Trust to AGF Management Limited.
Over the last 25 years, AGF has successfully grown AGF Trust from a
small, single product lending operation with only $200 million in loan
assets to the over $3 billion multi-product loan business that operates
today. The sale to B2B Trust, a firm with a similar business strategy
to AGF Trust, will ensure that clients experience minimal changes as a
result of the sale.
The sale of AGF Trust enables AGF to continue to be at the forefront of
meeting the needs of advisors and investors by delivering best-in-class
quality of service, innovative new investment products and improved
"This is an exciting and positive day for our firm," says Blake C.
Goldring, Chairman and Chief Executive Officer of AGF Management
Limited. "We have built AGF Trust into a very successful business and
selling now will allow us to focus our resources on the highest
potential opportunities for our company, which includes our existing
investment management centres of excellence and distribution
relationships, enhanced by a proactive acquisition strategy. We have
found an ideal partner to continue building the AGF Trust business.
Meanwhile AGF investment management operations will be better
positioned to provide greater value to all our stakeholders in the
Including the proceeds from the sale of AGF Trust and current unused
debt capacity, AGF will have approximately $615 million of available
capital to accelerate business growth for its Canadian and
international investment management operations. Key strategic
investments in the business will foster organic growth opportunities in
all of AGF's channels, including its retail, institutional and private
"We see new global opportunities opening up as a result of this
transaction," says Robert J. Bogart, Executive Vice-President and Chief
Financial Officer. "We have had considerable success building our
global distribution capabilities and are confident we will generate
more predictable growth results while leveraging our core strengths."
"Our team is energized and in place to move forward. We have found a
strong partner in B2B Trust and are pleased that, in concert with the
acquisition transition period, all AGF Trust employees will become
employees of B2B Trust. We're grateful to the employees and senior
management team for their contributions to the success of AGF Trust,"
In a Fairness Opinion provided by RBC Capital Markets, the sale
consideration received was deemed fair from a financial point of view,
subject to the assumptions and limitations contained therein. Subject
to regulatory approvals and financing, the transaction is expected to
close in August 2012.
Analysts and media are invited to participate in a conference call
discussing the sale of AGF Trust further at 11:30 a.m. Toronto time.
AGF will host a conference call to review today's announcement at 11:30
a.m. ET. The live audio webcast with supporting materials will be
available in the Investor Relations section of AGF's website at www.agf.com or at http://www.media-server.com/m/p/fopx38ef. Alternatively, the call can be accessed toll-free in North America by
dialing 1 866 804 6927 (Passcode #:17279586). A complete archive of
this discussion along with supporting materials will be available at
the same webcast address within 24 hours of the end of the conference
About AGF Management Limited
AGF Management Limited is one of Canada's premier independent investment
management firms with offices across Canada and subsidiaries around the
world. AGF's products include a diversified family of award-winning
mutual funds, mutual fund wrap programs and pooled funds. AGF also
manages assets on behalf of institutional investors including pension
plans, foundations and endowments as well as for private clients. In
addition, AGF Trust is a complementary business that offers GICs, loans
and mortgages through the financial advisor and mortgage broker
channels. With over $43 billion in total assets under management, AGF
serves more than one million investors. AGF trades on the Toronto Stock
Exchange under the symbol AGF.B.
Caution Regarding Forward-Looking Statements
This release includes forward-looking statements. Forward-looking
statements include statements that are predictive in nature, depend
upon or refer to future events or conditions, or include words such as
'expects,' 'anticipates,' 'intends,' 'plans,' 'believes' or negative
versions thereof and similar expressions, or future or conditional
verbs such as 'may,' 'will,' 'should,' 'would' and 'could.'
Forward-looking statements are based on certain factors and
assumptions, including expected growth, results of operations, economic
factors, business prospects, business performance and opportunities.
While the company considers these factors and assumptions to be
reasonable based on information currently available, they may prove to
be incorrect. Forward-looking statements are not guarantees of future
performance, and actual events and results could differ materially from
those expressed or implied by forward-looking statements due to, but
not limited to, important risk factors such as level of assets under
management, volume of sales and redemptions of investment products,
performance of investment funds and of investment managers and
advisors, competitive fee levels for investment management products and
administration, and competitive dealer compensation levels, size and
default experience on the company's loan portfolio and cost efficiency
in loan operations and investment management operations, as well as
interest and foreign-exchange rates, taxation, changes in government
regulations, unexpected judicial or regulatory proceedings, and the
company's ability to complete strategic transactions and integrate
acquisitions. The company cautions that the foregoing list is not
exhaustive. The reader is cautioned to consider these and other factors
carefully and not place undue reliance on forward-looking statements.
Forward-looking statements are given only as at the date of this
release and other than specifically required by applicable laws, the
company is under no obligation (and expressly disclaims any such
obligation) to update or alter the forward-looking statements, whether
as a result of new information, future events or otherwise. Additional
risks and uncertainties can be found in our MD&A for the fiscal year
ended November 30, 2011 under the headings "Caution Regarding
Forward-Looking Statements" and "Risk Factors and Management of Risk"
and in our other filings with Canadian securities regulatory
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