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June 6, 2012 /CNW Telbec/ - B2B Trust, a subsidiary of Laurentian Bank (TSX: LB), and AGF Management Limited, (TSX: AGF.B), today announced that they have entered into an agreement under which B2B Trust will acquire 100% of AGF Trust Company ("AGF Trust") in a share purchase transaction. B2B Trust will acquire AGF Trust for a consideration corresponding to the net book value of the company at closing of approximately $242
million (subject to changes in net book value between now and closing) and will also cause AGF Trust to repay subordinated indebtedness owed to and redeem preferred shares held by AGF Management Limited, for a consideration of $173.5
million. The total amount of approximately
$415.5 million will be paid in cash. The agreement also includes a contingent consideration of a maximum of
$20.0 million over five years if credit quality reaches certain criteria.
The transaction is expected to close in
August 2012 subject to applicable regulatory notifications and approvals.
AGF Trust will be integrated with B2B Trust and will provide the Canadian financial advisory and mortgage brokerage communities with best-in-class products and services to meet their unique needs. The combined entities will serve more than 27,000 advisors.
AGF Trust currently provides GICs, term deposits, investment loans and real estate secured loans through some 20,500 financial advisors and 1,050 mortgage brokers nation-wide. Total asset loan equal approximately
$3.1 billion of which
$1.8 billion is comprised of investment and RRSP loans and
$1.1 billion mortgage loans.
B2B Trust is recognized for its competitive array of banking products, including investment and RRSP loans, deposits, investment accounts and residential mortgages. B2B Trust's loan and deposit portfolios total
$6 billion and
$10 billion, respectively. With the acquisition of AGF Trust, B2B Trust's loan portfolio will increase by approximately 50%, while deposits will increase by 30%.
"The acquisition of AGF Trust certainly proves that B2B Trust is, and will always be, 100% committed to meeting the needs of the financial advisory community", said François Desjardins, President and CEO of B2B Trust. "We have been in a period of growth for the past several years now, and with the inclusion of AGF Trust's portfolio and services, B2B Trust will be well-positioned to continue developing industry-leading solutions."