Canadian banking major Scotiabank has reached an agreement to acquire MD Financial Management (MD) from Canadian Medical Association (CMA) in an all cash transaction valued at approximately C$2.58bn ($2bn).
MD Financial provides investment management and financial planning services to physicians and their families. It has more than C$49bn ($37.85bn) in assets under management and administration.
As part of the deal, Scotiabank has also inked a 10-year agreement with the CMA where by the latter will promote the bank as its preferred provider of financial services among Canadian doctors.
Scotiabank expects the transaction to boost its ability to provide comprehensive wealth services to physicians across Canada.
Commenting on the deal, Scotiabank president and CEO Brian Porter said: “MD has served the distinct financial needs of Canada’s physician community for decades and has delivered strong results.
“Through this transaction, MD clients will benefit from a greatly expanded range of financial solutions, including access to expertise across our wealth and asset management businesses. We look forward to providing customized banking services to a wider segment of the physician community in support of their unique needs.”
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Upon completion of the transaction, MD Financial Management will operate as a distinct, stand-alone brand within Scotia Wealth Management, retaining its existing people and management team.
As a result of the transactions, Scotiabank’s common equity tier 1 capital ratio will be impacted by almost 30 basis points.
The acquisition is slated to conclude during the fourth quarter of 2018, subject to receipt of regulatory approval approvals and other closing conditions.