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LOGiQ Asset Management and Purpose Investments Announce Retail Asset Management Transaction

LOGiQ Asset Management Inc. and Purpose Investments Inc. are pleased to announce today that they have entered into a purchase and sale agreement providing for the acquisition by Purpose of substantially all of the retail asset management agreements owned by LOGIQ and its affiliates. Under the terms of the Purchase and Sale Agreement, the purchase price for the retail asset management contracts to be acquired by Purpose will be $32.9 million, subject to adjustment based on the assets under management of the funds related to the acquired contracts at closing.

“The retail funds industry is experiencing massive change and ongoing consolidation. We believe that as scale becomes critical for retail fund managers, the benefits of a larger platform such as Purpose’s will translate into significant benefits for fund investors. This transaction will also materially improve the Company’s balance sheet and liquidity, and will allow us to focus on pursuing growth outside the retail funds sector, including a focus on growing our institutional global sales business under the direction of Steve Mantle and our institutional and private client business managed by Barry Morrison” said LOGiQ President and CEO, Joe Canavan.

“As we exit the retail funds business, we intend to retire the vendor note issued in connection with the acquisition of the Global Advisor platform from Integra Capital Limited in December, 2016 and to pay down the drawn amount, if any, on the Company’s working capital facility established in August with R.C. Morris & Company Capital Management. We also intend on significantly reducing the Company’s cost structure going forward as part of this transition” added Mr. Canavan.

“We are excited to acquire these high-quality, well-managed investment funds from LOGiQ,” said Purpose President and Chief Executive Officer, Som Seif. “Expanding and complementing our active management business continues to be an important part of our growth strategy at Purpose. This transaction will allow us to further expand our investment offerings and provide Canadians with an even broader selection of well-diversified portfolio solutions.”

“As one of Canada’s leading independent investment management firms, we look forward to growing these funds and continuing to deliver outstanding performance for our clients” continued Mr. Seif. “Over the next several months, we will work hard to better align the products through strategy enhancements and lower overall fees, with Purpose’s overall goals to provide accessible, intelligent solutions that help Canadians drive better portfolio outcomes.”

The closing of the Transaction, which is expected to occur by the end of December, is subject to a number of conditions precedent including the approval by the holders of securities of the funds for which management contracts are to be acquired by Purpose, approval by the holders of the LOGiQ common shares and the 7.00% senior unsecured convertible debentures due June 30, 2021, all required securities regulatory and stock exchange approvals, and satisfaction of other customary closing conditions.

FS Group Holdings Ltd. which holds an aggregate of 28% of LOGiQ common shares has entered into a voting support agreement to, among other things, vote in favour of the Transaction.

Board Recommendation

The board of directors of LOGiQ, after consultation with its financial and legal advisors, and based on the unanimous recommendation of a Special Committee of the LOGiQ board of directors established to review the Transaction, has unanimously recommended that holders of LOGiQ common shares and debentures vote in favour of the Transaction at a special meeting of shareholders and debentureholders to consider the Transaction. LOGiQ’s Special Committee has received a fairness opinion from Canaccord Genuity Corp. that, as of the date of such opinion, and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by the Company pursuant to the Transaction is fair from a financial point of view to the holders of the LOGiQ common shares.

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