Sun Life Financial has announced it has bought out the minority shares in its McLean Budden investment management subsidiary, and will transfer the business to its MFS Investment Management (MFS) unit.
Minority shareholders accounted for 32.4% of ownership, and the transaction is valued at about $144 million. That price will rise if certain performance targets are reached after the deal. The deal makes McLean Budden a wholly owned subsidiary of MFS.
“This transaction leverages strengths from across the Sun Life enterprise to generate value-building growth,” said Kevin P. Dougherty, president, Sun Life Financial Canada and president, Sun Life Global Investments Inc. “Clients worldwide will benefit through an expanded global research platform, a broader range of investment solutions and increased scale to service clients.”
McLean Budden’s mutual fund business will move to Sun Life Global Investments (Canada) Inc. McLean Budden will continue to provide portfolio management services as sub-advisors to the mutual funds. The transfer is expected to occur in April 2012, subject to regulatory approvals.
The combined assets under management of MFS and McLean Budden total $261 billion, as of the end of August. On its own, McLean Budden managed $32 billion on behalf of pension, foundation & endowment, private wealth and mutual fund clients.
“We look forward to working with the equity and fixed-income teams at McLean Budden to uncover investment opportunities and deliver them to clients in portfolios that are managed to meet their objectives and risk tolerances,” said Robert J. Manning, chairman and CEO of MFS.
Martin E. Beaulieu, currently vice-chairman and head of global distribution at MFS, will become chairman and CEO of McLean Budden and be based in Toronto. Roger J. Beauchemin, currently president and CEO of McLean Budden, will continue in his role until closing and work with Beaulieu on the integration.
The integration of McLean Budden into MFS will broaden the range of investment options available to the firm’s clients, giving them access to MFS investment strategies.
“The partners and employees of McLean Budden are very excited by this transaction. It represents a tremendous opportunity for our portfolio managers, research analysts and employees to join a great global franchise from our Canadian home base,” said Beauchemin. “The integrated firm will be unique in the Canadian marketplace with an unmatched investment platform and ability to serve clients.”
The transaction is expected to be completed in November, subject to regulatory approvals.