Scotiabank is acquiring independent investment firm Jarislowsky Fraser Ltd. for approximately $950 million.

The transaction will create the third-largest active asset manager in Canada with $166 billion in managed assets, according to a press release. The purchase will be made mostly through the issuance of Scotiabank common shares, and the company will offset the dilution of them by repurchasing a similar amount following the closing of the deal. The purchase price could rise to about $1 billion, based on performance targets.

Read: 2017 Top 40 Money Managers Report: Investing in the age of Donald Trump

The firm will maintain its autonomy in investing, founder Stephen Jarislowsky will continue his involvement with the firm and its headquarters will remain in Montreal. In addition, all of the firm’s partners will invest half of their proceeds from the deal into the company’s investment strategies.

“With its existing distribution footprint, Scotiabank is uniquely positioned to preserve the legacy of our firm and enable the next generation of growth,” said Jarislowsky in the release. “We look forward to continuing to serve our clients and to enhancing our investment capabilities to meet their needs today and in the future.”

Brian Porter, Scotiabank’s president and chief executive officer, noted the transaction aligns with the bank’s strategic commitment to diversify its global wealth management business. “Jarislowsky Fraser is an iconic Canadian brand with a disciplined investment process, a team‐oriented approach with a proven high‐calibre investment team, and a long history of delivering outstanding investment capabilities to institutional investors and high-net-worth families.”

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Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com

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