Fiera Capital Corporation (FSZ-T) says it has an agreement to acquire Integrated Asset Management. Fiera will pay about $74 million for the firm, which has about $3.1 billion in assets under management and committed capital.
In a release Friday morning, Fiera says IAM’s private debt investment team will be incorporated within Fiera Private Lending, and the industrial real estate team will join Fiera Properties.
“We are acquiring a real estate business with a unique investment strategy that is complementary to Fiera Properties’ existing business. For our clients, this means further investment opportunities into an asset class with stable and recurring cash flows and a unique level portfolio diversification,” said Peter Cuthbert, the president of Fiera Properties, in the release.
Boards of directors approve sale
The transaction has the unanimous support of the board of directors of both companies. IAM shareholders holding 62 per cent of IAM shares have agreements supporting the transaction, which is expected to close in the second quarter of 2019.
“This acquisition further strengthens and diversifies Fiera Capital’s private alternatives lending platform, bringing significant capabilities in private debt in addition to expanding our real estate platform,” said John Valentini, Fiera’s president and CEO of private alternative investments, in the release.
“We are excited to offer a leading private lending platform that is truly national and further develop our real estate investment strategies, while simultaneously driving the growth and distribution of an enhanced suite of private markets strategies.”
The $74-million price tag represents IAM’s enterprise value of $64 million and $10 million of adjusted cash on hand. Fiera Capital will pay $55.5 million in cash and $18.5 million of Fiera Capital Class A subordinate voting shares, as well as receive additional contingent value rights for IAM shareholders.
“With this acquisition, Fiera Private Lending becomes one of the leading pan-Canadian non-bank lending platforms in the country,” said Jean Gamache, the president of Fiera Private Lending, in the release.
“In addition to an experienced team and a long track record of performance, IAM brings a complementary product offering with its long-term loans, strengthening our existing portfolio and providing Fiera Capital investors with even more opportunities for diversification.”
The transaction is subject to approvals by IAM shareholders at a special meeting to be called in May.
The two largest IAM shareholders, who hold approximately 52.6 per cent of IAM Shares have entered into binding six-month agreements to vote in favour of the transaction. Other directors and senior officers holding 9.4 per cent of IAM shares have also entered into support agreements.
“Joining forces with Fiera Capital creates an opportunity for IAM shareholders to realize immediate value and liquidity as well as the opportunity to participate in a larger combined company well-positioned for future growth,” said John Robertson, president and CEO of IAM, in the release.
In addition to IAM shareholder and court approvals, the transaction is subject to regulatory approvals, and other customary conditions.
IAM’s real estate business
IAM’s real estate line is managed by president David Pappin. The company calls itself, “a value-driven, core manager,” employing a “highly disciplined style to blend stable, growing income, inflation protection, reduced volatility and capital appreciation.”
The group was created as an industrial specialist, but has since broadened its portfolios to include office and retail properties. Since inception, the group has raised $1.2 billion in 13 sequential funds and one separate account. Investors include pension funds, endowments, foundations and family offices.
With the completion of the initial investment period for its 13th fund, the IAM Real Property Fund opened on March 31, 2017.
IAM now has about 100 properties across Canada in its portfolio, representing just under five million square feet according to its website. The largest concentration is in Ontario, with 42 properties comprising about 2.3 million square feet.
It is headquartered in Toronto, with another office in Montreal.
About Fiera Capital Corp. and IAM
Fiera is a global independent asset management firm with approximately $136.7 billion Cdn in AUM delivering customized multi-asset solutions across traditional and alternative asset classes to institutional, retail and private wealth clients across North America, Europe and key markets in Asia.
IAM is one of Canada’s leading alternative asset management companies with approximately $3.1 billion in assets and committed capital under management in private debt, infrastructure debt and real estate as of Feb. 28, 2019.