DBRS Morningstar Comments on Desjardins Group’s Planned Acquisition of Life Insurance, Mutual Fund, and Investment Distribution Networks

DBRS Limited (DBRS Morningstar) notes that Desjardins Group’s (Desjardins or the Group; rated AA with a Stable trend by DBRS Morningstar) ratings are unaffected following the announcement that it has entered into definitive agreements to acquire Guardian Capital Group Limited’s life insurance, mutual fund, and investment distribution networks.

The $750 million deal will see Desjardins acquire IDC Worldsource Insurance Network Inc., one of Canada’s largest life insurance managing general agencies; Worldsource Financial Management Inc., a mutual fund dealer; and Worldsource Securities Inc., a full-service investment dealer. The acquisition will give Desjardins a leading position in the independent distribution of life insurance and retail investment products in Canada and accelerate its growth strategy across the country. The Group plans to operate the acquired companies as stand-alone entities.

The accretive transaction—which is expected to close in Q1 2023 and is subject to customary closing conditions, including regulatory approvals—will be easily absorbed through Desjardins’ current liquidity and have a minor impact on its capital.

Notes:
All figures are in Canadian dollars unless otherwise noted.

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