Mackenzie and Great-West Lifeco to Acquire Strategic Interest in Northleaf Capital Partners
Posted on 09/24/2020
Disclosed on September 17, 2020, Mackenzie Financial Corporation (Mackenzie Investments), an IGM Financial Inc. (“IGM”) subsidiary and Great-West Lifeco Inc. (Lifeco) acquired a 49.9% non-controlling interest in Northleaf Capital Partners Ltd. through an acquisition vehicle. Mackenzie will own 80% of the acquisition vehicle in Northleaf, while Great-West Lifeco will own 20% of it. The acquisition vehicle will hold a 70% economic interest in Northleaf for consideration that includes a payment on closing of CAD$ 245 million as well as contingent consideration at the end of five years should the business achieve exceptional growth in performance measures over the period. Mackenzie and Lifeco will have an obligation and right to purchase an additional equity and voting interest in the firm commencing in approximately five years and extending into future periods.
Under the agreement Northleaf’s senior leadership will maintain a 50.1% voting interest in the firm, which will remain employee-controlled and operationally independent and there will be no change in Northleaf’s investment decision making or investor relations activities.
In addition, IGM and Lifeco together have committed to invest a minimum of CAD$ 700 million in the next 18 to 24 months across a number of Northleaf’s product offerings. This includes Lifeco balance sheet commitments as well as allocations to client portfolios within managed solutions of IG Wealth Management. The strategic relationship is expected to result in additional commitments over time, providing long-term and fully aligned capital alongside Northleaf’s institutional investors.
Closing of the transaction remains subject to certain closing conditions and customary purchase price adjustments, including regulatory approvals, and is expected to occur during the fourth quarter of 2020.
