Post by
hawk35 on Jan 13, 2022 11:51am
Comments from TD Waterhouse
TD rates Fiera a hold with target of $11.50. Currently just watching this stock.
Fiera Capital Corp.
(FSZ-T) C$10.73
Natixis Selling its Stake in Fiera Capital
Event
Second largest shareholder Natixis is selling its 10.7mm shares.
Impact: NEGATIVE; shares being sold at a 9% discount
Last night, Fiera announced that Natixis is selling all of its 10.68mm Class[1]A subordinate voting shares in Fiera Capital (10.3% stake). Fiera Capital LP remains the largest shareholder, with an ~24% stake (a joint group including the founder of Fiera, Jean-Guy Desjardins, and 'The Desjardins Group').
Fiera is repurchasing 3.56mm shares from Natixis for $34.9mm (implies $9.80/share or an ~9% discount to yesterday's close). Fiera intends to cancel these repurchased shares. Fiera is increasing its NCIB to 6.3mm shares (from 4.0mm) to accommodate the repurchase. To-date, Fiera has repurchased 1.0mm shares under its NCIB.
The remaining 7.12mm shares are being sold through a block trade. These shares represent ~7% of Fiera's outstanding shares.
Natixis bought the 10.68mm shares in May 2019 (from National Bank) at $12.00 per share as part of a long-term strategic partnership with Fiera. The partnership established a five-year distribution agreement, which made Fiera Capital the preferred Canadian distribution platform for Natixis. In turn, Natixis agreed to distribute Fiera products to its international client base.
The distribution agreement between Natixis and Fiera will remain in force. However, the investor rights agreement between Natixis and Fiera Capital, Call Option agreement with Fiera Capital L.P. (sole holder of Class B shares), Put Option agreement with Jean-Guy Desjardins, and voting arrangements between Natixis and Jean-Guy Desjardins will be terminated.
Natixis has undergone significant change over recent years. This has included a new CEO in 2020, going private in 2021, and selling some divisions. The company has indicated that it is looking to grow its asset management division through M&A, and would consider listing its asset management division to finance M&A growth.
We do not believe that this transaction will have any impact on the Class[1]B shares held by Fiera Capital LP (Jean-Guy Desjardins and the Desjardins Group). These shares entitle Jean-Guy Desjardins to elect two-thirds of the Board.
Fiera is trading at 7.2x 4QF EBITDA and 7.3x 4QF P/E. These compare with the L5Y averages of 9.0x and 9.1x, respectively.