Financial services company iA Financial Group makes an offer to acquire RF Capital
Quebec-based iA Groupe financier has announced the acquisition of RF Capital Group for approximately $597 million, significantly expanding its wealth management division. The deal, which includes $370 million for RF Capital's equity and $227 million in financial obligations, will boost iA's assets under administration (AUA) by over $40 billion, increasing the total AUA to about $175 billion.
Background and History
Founded in 1892, iA Groupe financier is one of Canada's largest insurance and wealth management groups, headquartered in Quebec. RF Capital Group, listed on the Toronto Stock Exchange (TSX: RCG), is an independent wealth management firm with a national presence and a focus on high-net-worth clients. The acquisition was supported by RF Capital’s Special Committee and Board of Directors with fairness opinions from major financial advisers.
Financial Implications
The purchase price represents a 102% premium over the 30-day volume-weighted average trading price of RF Capital’s shares on the TSX. iA plans an advisor retention strategy to maintain and grow RF Capital’s distribution network, aiming to realize synergies in technology, operations, innovation, and product offerings. The acquisition is expected to be neutral to iA’s core earnings in the first year, becoming accretive by at least $0.15 per share in the second year.
Market Positioning
The acquisition extends iA’s national footprint across Canada, leveraging RF Capital’s complementary wealth advisory distribution model. It improves iA’s advisor digital platform and product selection capabilities, increasing the personalized financial solutions offered to clients. With the combined scale, iA can benefit from economies of scale and enhance competitiveness within the Canadian financial services industry.
In summary, the acquisition of RF Capital by iA Groupe financier is a strategic move to substantially grow iA’s wealth management assets, deepen its market presence in high-net-worth client segments, and achieve financial synergies that improve long-term profitability and competitive positioning in Canada’s financial sector. The transaction would position iA Financial Group as the largest non-bank independent wealth manager in the country.
The acquisition of RF Capital Group, a national wealth management firm with a focus on high-net-worth clients, by Quebec-based iA Groupe financier, a prominent Canadian insurance and wealth management group, offers an opportunity for iA to expand its French-speaking clientele in wealth management. This strategic move also allows iA to enhance its finance investing capabilities by leveraging RF Capital's robust network and innovative technology.
