National Bank sells division

banking • National Bank of Canada said Monday it has agreed to sell its investment management business to independent investment firm Fiera Sceptre Inc. in a deal worth $309.5 million.

Under terms of the deal, Natcan Investment Management Inc. will be fully integrated into Fiera’s operations and, upon closing, renamed Fiera Capital.

In exchange, National Bank gets Class A subordinate voting shares representing a 35 per cent minority stake in Fiera, with the option to boost its stake to 40 per cent.

Fiera will first pay $235 million upon closing through the issuance of 19.71 million Class A shares with cash covering the remainder. After that, Fiera will pay out $74.5 million over time as long as certain minimum asset under management thresholds are met by the bank.

National Bank estimates the deal will result in a gain of about $177 million, or $1.09 a share, and will increase its Tier 1 capital ratio by about 20 basis points.

Jean-guy Desjardins, chief executive of Fiera, will continue in his current role and remains controlling shareholder of the company.

With this deal, Fiera will have $54 billion in assets under management, making the company one of the largest independent asset managers in Canada.

The deal is expected to close by April 30.