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Press release from Marketwire

Fiera Capital Acquires Prominent Wealth Management Firm in Los Angeles and Global Manager in New York

- Bel Air Investment Advisors of Los Angeles and Wilkinson O'Grady of New York City acquired for US$156.25 million - Creates Powerful $10B AUM North American Platform - Announces C$100M Equity Financing

Tuesday, September 03, 2013

Fiera Capital Acquires Prominent Wealth Management Firm in Los Angeles and Global Manager in New York

16:25 EDT Tuesday, September 03, 2013

MONTREAL, QUEBEC--(Marketwired - Sept. 3, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Fiera Capital Corporation ("Fiera" or the "Firm") (TSX:FSZ) announced today that it has reached agreements to acquire a prominent U.S. wealth management firm and, separately, a global asset manager as part of its strategy to expand into the U.S. market.

Fiera has agreed to acquire Los Angeles, California based Bel Air Investment Advisors, LLC as well as its affiliate Bel Air Securities LLC (collectively "Bel Air"), and New York based investment manager Wilkinson O'Grady & Co., Inc. ("Wilkinson O'Grady") (the "Transactions"). These acquisitions add C$8.5 billion in assets under management (AUM) to Fiera's private wealth segment. Total consideration for the Transactions is approximately US$156.25 million. Fiera expects to generate low double digit accretion to its 2014 adjusted net earnings per share from the Transactions.

Robust Platform for North American Growth

"We are very proud to join forces with these two experienced and highly credible teams. We see tremendous growth potential in the U.S. private wealth market and these transactions fit perfectly with our plan to create value by becoming a leading North American investment management firm within the next five years," said Jean-Guy Desjardins, Chairman and Chief Executive Officer of Fiera. "Increasing our assets under management by C$8.5 billion to approximately C$74 billion, these acquisitions enhance our North American footprint and add depth to our investment and servicing teams."

"Bel Air has established itself as one of the nation's largest independent advisors to the attractive ultra-high net worth segment of the private wealth market. By partnering with Bel Air, Fiera will be uniquely positioned to expand its wealth management business internationally and serve clients coast to coast," Mr. Desjardins added.

The Bel Air brand will operate under Fiera Capital Private Wealth North American (FCPWNA)'s division. The business unit will be led by Todd Morgan, Senior Managing Partner of Bel Air, who will become Chairman of FCPWNA.

"Wilkinson O'Grady's established investment platform and long track record as a notable New York manager extend our portfolio management capabilities with an attractive global offering geared toward the taxable high net worth client," Mr. Desjardins said. "We are excited that Wilkinson O'Grady's Chief Executive Officer and Chief Investment Officer, Donald M. Wilkinson, III, will join as Chief Investment Officer for FCPWNA."

Bel Air

Founded in 1997, Bel Air is a prominent private wealth management firm focused on the ultra-high net worth segment of the private wealth market, with C$6.3 billion in assets under management and C$1.4 billion in consulting assets. Bel Air is a highly-recognized wealth management brand in California, the fastest growing wealth management market in the United States. The firm will be acquired for consideration of US$125 million subject to various adjustments, including a maximum of US$115 million in cash. The remaining US$10 million will be paid to the selling shareholders by issuing new Fiera Class A subordinate voting shares over a 32-month period following closing. US$15 million of the cash consideration will be held in escrow for a period of three years. As part of the transaction, Bel Air's management team and other key personnel will also receive performance share units in Fiera and will join the Firm to play a pivotal role in the continued success of the business.

"Fiera has built an impressive investment business under the leadership of Jean-Guy Desjardins and Sylvain Brosseau," said Morgan. "Fiera shares our philosophy for placing the clients' best interests first, and is willing to commit the necessary resources to expand our business throughout North America. Collectively, we will have greater global intelligence and research, while garnering greater access to more alternative investment strategies."

Wilkinson O'Grady

Founded in 1972, Wilkinson O'Grady is a well-established investment firm that manages approximately C$2.2 billion for individuals, families, trusts, endowments, and foundations located around the world. Serving more than 500 client accounts, Wilkinson O'Grady is part of the larger Global Investment Capital Holding Limited Group ("GIC").

Wilkinson O'Grady will be acquired for an aggregate purchase price of US$31.25 million consisting of US$29.7 million in cash and US$1.6 million worth of Fiera Class A subordinate voting shares (which reflects the roll-over of senior employee ownership in Wilkinson O'Grady into newly issued Fiera Class A subordinate voting shares). As part of the Transactions, key employees of Wilkinson O'Grady will join the Fiera team under long-term employment agreements.

"We are excited to join forces with Fiera," said Donald M. Wilkinson, III, Chief Executive Officer of Wilkinson O'Grady. "Our combined resources will only enhance the competitive investment solutions and highly personalized service that our clients are accustomed to receiving. We have every confidence that the transaction will be a success for our clients and our respective firms."

Strong Benefits for Clients

The Transactions create a large North American private wealth manager with more than C$10 billion in client assets, and offer significant advantages to clients of Fiera Private Wealth, Bel Air and Wilkinson O'Grady, which translate into:

  • Broader choice of North American based investment solutions, including alternative strategies;
  • Talented teams of professionals with a depth of hands-on knowledge and experience in private wealth markets; and
  • Introduction of numerous innovative and competitive investment strategies as a result of ongoing research and development initiatives.

Financing of the Transactions

Concurrent with the Transactions, Fiera announced today that it has entered into an agreement with National Bank Financial Inc. and GMP Securities L.P. as co-lead underwriters, pursuant to which such underwriters have agreed to purchase, on a private placement bought deal basis, C$68,638,750 of subscription receipts (the "Subscription Receipts") at a price of C$10.75 per Subscription Receipt (the "Underwritten Private Placement").

In addition to and concurrently with the closing of the private placement, National Bank of Canada has informed Fiera that it intends to exercise its right of anti-dilution and purchase C$31,368,500 of Subscription Receipts at a price of C$10.75 per Subscription Receipt (the "Concurrent Private Placement" and, together with the Underwritten Private Placement, the "Private Placements"). It is expected that National Bank of Canada will maintain its 35% ownership in Fiera following closing of the Private Placements and assuming payment by Fiera to National Bank of Canada of its first annual payment on account of the balance of the purchase price of the business assets of Natcan Investment Management Inc. in Class A subordinate voting shares on or about September 30, 2013. In aggregate, the Private Placements will result in gross proceeds to Fiera of C$100,007,250.

Moreover, Fiera has granted the underwriters an option (the "Underwriter's Option"), which may be exercised by the underwriters at any time up to 48 hours prior to the closing of the Underwritten Private Placement, to increase the size of the Underwritten Private Placement by up to an additional 478,000 Subscription Receipts for additional gross proceeds of up to C$5,138,500, representing 7.5% of the Underwritten Private Placement. If such option is exercised in full, C$3,343,250 will be purchased by the Underwriters and C$1,795,250 will be purchased by National Bank of Canada under its right of anti-dilution.

The proceeds of the Private Placements, including any proceeds from the Underwriter's Option, will be used to fund a portion of the purchase price for the acquisition of Bel Air.

The net proceeds from the sale of the Subscription Receipts will be held by an escrow agent until all conditions, undertakings and other matters to be satisfied prior to completion of the purchase of Bel Air in accordance with the purchase agreement have been met or waived, other than the payment of the consideration for the purchase of Bel Air for which the escrowed proceeds are required, in whole or in part.

Upon closing of the purchase of Bel Air, (i) each Subscription Receipt will be automatically exchanged for one Class A subordinate voting share of Fiera for no additional consideration and (ii) an amount equal to the dividends that have been declared on each Class A subordinate voting share by Fiera for which record dates have occurred during the period from the closing date of the Private Placements to but excluding the Bel Air acquisition date will become payable (less any applicable withholding taxes, if any) in respect of each Subscription Receipt.

The Private Placements are expected to close on or about September 18, 2013 and are subject to certain conditions, including the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.

If (i) the purchase of Bel Air fails to close on or before February 1, 2014, or (ii) the agreement is terminated prior to such time, or (iii) Fiera advises the underwriters or discloses to the public that it does not intend to proceed with the purchase of Bel Air, the holders of the Subscription Receipts will be entitled to receive an amount equal to the full subscription price thereof plus their pro rata share of any interest earned on the net proceeds of the Private Placements (less applicable withholding taxes, if any).

The Subscription Receipts will be sold in Canada on a private placement basis pursuant to "accredited investor" exemptions under National Instrument 45-106 and certain other available and agreed upon exemptions. The Subscription Receipts, together with any underlying Class A subordinate voting shares issued pursuant to the terms thereof, will be subject to a four-month hold period following the issuance of the Subscription Receipts.

The Subscription Receipts to be offered pursuant to the Underwritten Private Placement will be offered to non-US persons outside of the United States. Such Subscription Receipts have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Subscription Receipts in the United States or any jurisdiction in which such offer, solicitation or sale would be unlawful.

Expanded Debt Facilities

Fiera also announced today that it has received indicative terms and conditions from National Bank Financial relating to the amendment of its existing credit facilities under which Fiera will benefit from a C$75,000,000 revolving facility and a C$175,000,000 term loan serving for general corporate purposes and to finance the Transactions. The amendment of Fiera's credit facilities in accordance with the foregoing is subject to certain conditions, including execution of satisfactory binding documentation.

Approvals

The Transactions are subject to customary conditions, including applicable regulatory approvals, including the Toronto Stock Exchange, and are expected to close on or about October 31, 2013.

Advisors

GMP Securities L.P. acted as financial advisor to Fiera in connection with the Transactions. Davis Polk & Wardwell LLP acted as U.S. legal counsel to Fiera while Fasken Martineau acted as Canadian legal counsel.

Silver Lane Advisors acted as financial advisor to Bel Air and Bingham McCutchen LLP acted as Bel Air's legal counsel.

McGuireWoods LLP acted as Wilkinson O'Grady's legal counsel.

Norton Rose Fulbright Canada LLP acted as counsel to the co-lead underwriters in connection with the Underwritten Private Placement.

Conference Call

A conference call with senior executives to discuss the Transactions and the Private Placements will be held today, September 3, 2013, at 4:45 P.M. Eastern Time, by phone at 1-888-231-8191. Please join the call at 4:40. Media are invited to participate in the call on a listen-only basis.

Management's presentation will be available on the website of Fiera at: http://www.fieracapital.com/en/about_fiera_capital/investor_relations/events/.

Rebroadcast of Conference Call

The conference call recording will be available until September 10, 2013 by dialing 1-855-859-2056 and entering access code 45422329.

About Fiera Capital Corporation

Fiera Capital Corporation is a leading publicly traded, independent investment firm. The Firm is one of only a handful of full service, multi-product investment firms in Canada, offering clients a proven top tier track record in Canadian and foreign equity and fixed income management as well as depth and expertise in asset allocation and non-traditional investments. www.fieracapital.com.

Additional information relating to the Firm, including the Firm's annual information form, is on SEDAR at www.sedar.com.

About Bel Air Investment Advisors

Established in 1997, Bel Air Investment Advisors LLC is a prominent independent wealth management advisory firm, providing financial advisory, and asset and investment management services to exclusively high net worth individuals, families, trusts and foundations with $20 million or more in investable assets. Headquartered in Los Angeles, California, Bel Air services over 275 families across the United States and oversees approximately C$7.7 billion in assets, including private foundation relationships. For more information, visit, www.belair-llc.com.

About Wilkinson O'Grady & Co., Inc.

Founded in 1972, Wilkinson O'Grady & Co., Inc. actively manages separate global, domestic and international portfolios for wealthy individuals, families, trusts, endowments, foundations, corporations and other clients. Wilkinson O'Grady & Co. is a global investor that builds client portfolios around enduring investment themes - the economic and social forces that drive long-term change. Wilkinson O'Grady & Co. endeavors to grow client capital by investing in the marketable securities of businesses it believes have attractive financial characteristics, strong management teams and significant market opportunities.

About the GIC Group

The GIC Group is a privately owned private equity company active in the multi-family office business, wealth advisory and wealth management services as well as IT solutions and services to Asset management and Private Banking Industry. The sale of Wilkinson O'Grady is part of the GIC Group's strategy to refocus its activity on its European and Middle Eastern core market.

Forward-Looking Statements

This document may contain certain forward-looking statements. These statements relate to future events or future performance, and reflect management's expectations or beliefs regarding future events, including business and economic conditions and Fiera's growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", "target", "intend" or the negative of these terms, or other comparable terminology.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements. In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement.

These factors include, but are not limited to, market and general economic conditions, the nature of the financial services industry, and the risks and uncertainties detailed from time to time in Fiera 's interim and annual consolidated financial statements, and its Annual Report and Annual Information Form filed on www.sedar.com.

With respect to management expectations concerning accretion of the Transactions on 2014 Adjusted Net Earnings, such expectations are based on information available to management and certain assumptions, including with respect to the accuracy of the financial information and financial statements of Bel Air and Wilkinson O'Grady, the level of client assets under management with Bel Air and Wilkinson O'Grady following the acquisitions, assumptions regarding growth in Bel Air and Wilkinson O'Grady's assets under management and realization of synergies. Actual results could differ depending on a number of factors, including the ability to retain key personnel at Bel Air and Wilkinson O'Grady following the acquisitions, the ability to retain clients and assets under management following the acquisitions, negative market conditions and foreign exchange impact.

These forward-looking statements are made as of the date of this document, and Fiera assumes no obligation to update or revise them to reflect new events or circumstances.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Media Information
Amelie Cliche
Consultant, NATIONAL Public Relations
514 843-2339

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