TORONTO, Dec. 14, 2023 /CNW/ - EQB Inc. ("EQB") (TSX: EQB) and (TSX: EQB.PR.C) today announced the successful completion of its previously announced acquisition of a 75% interest in ACM Advisors Ltd., ("ACM") one of Canada's largest and most well-respected alternative asset managers with nearly $5 billion in assets under management.
"By closing this transaction, ACM and EQB begin a new chapter of value creation for our investors that will see our two organizations collaborate with a view to long-term growth and competitive advantage," said Andrew Moor, President and Chief Executive Officer, EQB. "In ACM, we gain a trusted name that pioneered a specialized area of wealth and asset management for institutional and accredited retail investors. We couldn't be more excited about this partnership thanks to the ACM team's superior talent, proven track record and promising scale."
ACM specializes in the creation, structuring, and management of pooled Canadian commercial mortgage funds. As of today, ACM will operate as an independent majority-owned subsidiary under EQB with a mandate to sustain strong returns for clients while also exploring opportunities for new investment fund portfolio offerings. As previously announced, ACM's existing management team has retained a 25% ownership position and will remain with the organization.
"Joining EQB is a strategic decision that allows the ACM team to maintain our focus on risk-managed value creation while exploring new possibilities in asset management on behalf of our valued clients," said Chad Mallow, President and CEO, ACM. "Our two organizations share many qualities including industry-leading expertise, a relentless pursuit of best-in-class client service and committed and long-term leadership with decades of experience in commercial real estate mortgages. From this common ground, I look forward to working to achieve our joint growth and performance ambitions."
ACM will contribute to a meaningful increase in EQB fee-based revenue and is expected to contribute to EQB's long-term 15% to 17% return on equity ("ROE") north star, with year one earnings accretion. Accretion does not depend on cost or revenue synergies, and no operational integration is planned. There is also no direct credit or balance sheet exposure for EQB from the addition of ACM's assets under management.
"ACM's rigorous approach to delivering upscale returns to investors for over 30 years makes it a natural addition to EQB Inc., the best TSR performer of any Canadian Schedule I bank over the past decade," said Chadwick Westlake, Chief Financial Officer, EQB. "As we join forces, we are particularly pleased to see ACM's recent momentum continue as the level of investors and AUM continues to achieve new record highs - milestones that we believe reflects investor confidence and trust. We are thrilled to welcome Chad Mallow, Chad Mercer and the entire ACM team to EQB as we begin the exciting work of expanding our wealth management business opportunities together."
EQB Inc. trades on the Toronto Stock Exchange (TSX: EQB and EQB.PR.C) and has over $111 billion in combined assets under management and administration. A wholly owned subsidiary of EQB Inc., Equitable Bank, Canada's Challenger Bank™, is the seventh largest bank in Canada by assets and serves more than 578,000 customers. Equitable Bank's subsidiaries Concentra Bank and Concentra Trust support Canadian credit unions and their more than 6 million members. Equitable Bank has a clear mandate to drive change in Canadian banking to enrich people's lives. Founded more than 50 years ago, it provides diversified personal and commercial banking, and through its digital EQ Bank platform (eqbank.ca) has been named the top Schedule I Bank in Canada on the Forbes World's Best Banks 2021, 2022 and 2023 lists. Please visit eqbank.investorroom.com for more details.
ACM Advisors is a leading Canadian institutional alternative asset manager with nearly $5 billion in assets under management across four funds. Founded in 1993, ACM has grown to be one of the largest private investment fund managers in Canada, specializing in the creation, structuring and management of pooled Canadian commercial mortgage funds on behalf of over 2,000 clients including its investors: pension plans, investment funds, charitable foundations, corporations, and accredited retail investors; and its commercial borrowers. Based in Vancouver, BC, ACM has 30+ year track record of successful performance.
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Statements made by EQB in the sections of this news release, in other filings with Canadian securities regulators and in other communications include forward-looking statements within the meaning of applicable securities laws (forward-looking statements). These statements include, but are not limited to, expected ROE or earnings accretion from the acquisition, EQB's objectives, strategies and initiatives, financial performance expectations and other statements made herein, whether with respect to EQB's businesses, ACM or the Canadian economy. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases that state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved", or other similar expressions of future or conditional verbs. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of EQB to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions, legislative and regulatory developments, changes in accounting standards, the nature of our customers and rates of default, and competition, as well as those factors discussed under the heading "Risk Management" in the MD&A and in EQB's documents filed on SEDAR at www.sedarplus.com. All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current credit, interest rate, and liquidity conditions affecting EQB, its subsidiaries, and the Canadian economy. Although EQB believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material assumptions are applied by EQB in making forward-looking statements, including without limitation, assumptions regarding its continued ability to fund its mortgage business, a continuation of the current level of economic uncertainty that affects real estate market conditions, continued acceptance of its products in the marketplace, as well as no material changes in its operating cost structure and the current tax regime. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. EQB does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.
SOURCE EQ Bank