TD Asset Management is set to become the largest money manager in Canada following the announcement of its acquisition of Greystone Managed Investments.
TD Bank announced Tuesday that it will acquire Greystone Managed Investments, a multi-asset investment house based in Regina, Saskatchewan with C$36 billion in its care.
Under the terms of the deal, TD Bank will pay C$792 million ($604 million) for the company. Of that purchase price, enterprise value comprises C$730 million and seed capital C$105 million, according to TD’s announcement.
“Greystone’s leadership in alternative investments is a perfect complement to TDAM’s traditional investment products,” said Leo Salom, head of the wealth management and insurance group, in a statement.
As a result of the deal, the investment division’s assets under management will increase from C$357 billion to C$393 billion, according to the press release. The firm will overtake RBC Global Asset Management as the largest fund firm in Canada, based on Benefits Canada’s yearly rankings.
Per the terms of the deal, Greystone’s shareholders will receive 30 percent of the net purchase price in TD shares and will be repaid the remaining balance in cash. They can elect up to an incremental 20 percent of the purchase price, which means that Greystone shareholders can receive up to 50 percent of their payment in TD shares.
Greystone will continue to operate out of Regina, but under the name TD Greystone Asset Management. The firm offers fixed income, Canadian equities, U.S. equities, international equities, real estate, mortgage, and infrastructure investment strategies.
“Their robust suite of proven alternative and traditional investment solutions, combined with the scope and strength of TD’s existing offerings, will provide clients with compelling solutions to enhance their current portfolios,” said Salom in a statement.
The acquisition is expected to close in the second half of 2018, according to the statement from TD Bank. It is expected to be accretive to TD’s earnings by the third year of ownership.
“Joining forces with TD will add tremendous value to Greystone clients interested in expanding and diversifying their investment portfolios,” said Robert Vanderhooft, chief executive officer and chief investment officer of Greystone.
"TD’s core values, combined with its progressive employee culture and long-term investment philosophies are in perfect alignment with Greystone,” he added.