Dundee Wealth bids for IPC Financial

(December 27, 2002) Dundee Wealth Management, the parent company of Dynamic Mutual Funds, is again expanding its distribution network, today announcing a friendly cash and stock takeover bid for IPC Financial Network.

Under the terms of the deal, each common share of IPC will be exchanged for $0.25 in cash, 0.05 of a common share of Dundee Wealth, and 0.125 of a share of one of two Dundee Wealth preferred shares. The transaction is based on 66-million IPC shares outstanding, making the cash value of the offer $16.5 million.

“Both Dundee and IPC have a unique shared vision as to the importance of the independence of the financial advisor and the need to provide investors with the best investment solutions,” said Dundee CEO Ned Goodman in a statement.

The board of IPC has unanimously approved the transaction and has recommended it to shareholders. Senior IPC executives, including CEO Steve Meehan and vice chairman Chris Reynolds, are expected to stay with the merged company.

“The fit between Dundee and IPC is excellent,” said Meehan. “The two companies share a common vision with respect to creating long-term value for shareholders, the need for independence, and the commitment to innovative investment solutions.”

IPC runs Counsel Funds, which will continue as a stand-alone fund group.

The deal is expected to close in March, pending shareholder and regulatory approval. The combined companies would have $23 billion in assets under management, and 1,300 advisors in 340 branches.

“This whole thing is about distribution,” says industry analyst Kevin O’Leary. “The next three to five years in wealth management in Canada are going to be about who’s got more advisors, who’s got more product, and who can cut their costs of operations the most,” O’Leary told Report on Business television.

It’s the third acquisition for Dundee this year. In May, the firm bought Canadian First Financial Group, the parent of Ross Dixon Financial Services Limited and Hewmac Investment Services, in a cash deal estimated at $11.3 million. Dundee also acquired StrategicNova from a subsidiary of the Caisse depot et placement du Quebec in July. Terms of that deal were not released.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca