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 investment capabilities.
"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 future."
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 client businesses.
"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," adds Goldring.
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 call.
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 authorities.
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