ING emerges victor in Equisure takeover

ING Canada emerged the victor in the longstanding bidding process to acquire broker network consolidator Equisure Financial Network (TSE:EFN). The deal was recently closed at a $7 a share cash offer, pegging the overall value at around $160 million.

Subject to regulatory approval, the deal also depends on whether Equisure shareholders are willing to tender at least two thirds of their shares to the ING offer. The offer will be mailed out to shareholders by the end of September, comments Equisure president George Hutchison, and will closed at the end of 21 days from that date.

In a media release, Equisure’s directors note, “…the board has agreed to support the offer and to recommend acceptance of the bid to Equisure’s shareholders. Equisure’s board has received an opinion from BMO Nesbitt Burns Inc. that the offer is fair to the shareholders of Equisure from a financial point of view.”

Company directors Hutchison, David Williams, Gilbert Souliere, Hector Lavigne, Neil Forth and Lynne Hutchison have agreed to sell to ING approximately 2.9 million shares held by them, representing 13% of the outstanding shares of the company. The deal does allow Equisure the right to terminate the agreement in the event a superior offer is made by an unsolicited third-party bidder before close. In such an event, Equisuire is required to pay ING $5.75 million in cost recovery.

Hutchison will remain as president of Equisure, and “business will be as usual” he comments. ING will, however, look to convert the network to a private company. This will not have a material impact on the network’s growth strategy — which will continue to support an acquisitional expansion approach. Although Equisure will continue to operate as an independent business unit within the ING group, the marriage will enhance the range of alternative financial products available. “ING has been very public in wanting to expand distribution of other financial products.”

And, while a statement issued by ING suggests that the company has entered into an agreement with other parties in its bid to acquire Equisure, Hutchison points out that the offer made has been by ING solely. ING has suggested it is open to selling equity positions of individual firms within the network back to principals as a motivational driver. This, Hutchison comments, has to be seen separately to the offer struck between ING and Equisure, and that no brokerages will be sold out of the network. “ING definitely wants to expand the network.”

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