Canadian Western Bank sets Q1 date for $120m Maxium Group acquisition

Canadian Western Bank (TSE:CWB, Mkt cap 1.85B, P/E 8.91, Div/yield 0.23/4.00, EPS 2.58, Shares 80.53M) will complete the acquisition of Maxium Financial Services Inc. and Desante Financial Services Inc., together known as the Maxium Group, during the first quarter of 2016 in a deal worth up to $120 million.

Maxium Group, a privately held financing company that provides loans, equipment leases and structured financing solutions, boasts more than 35,000 clients.

It conducts most of its business in Ontario, with a portfolio including health care, golf, transportation, real estate, and general corporate financing. According to an official release in September, it has securitized lending assets totalling around $1 billion.

The purchase agreement is structured over three years, with the closing date slated for the first quarter of 2016, CWB said in a news release.

Some $30 million of the acquisition will be funded by CWB common shares, while the bank will stump up $19.5 million in cash, with contingent payments, that will total up to $70.5 million based on Maxium Group’s business performance over a 36-month period, bringing the deal up to the $120 million mark.

Chris Fowler, CWB’s president and chief executive, explained why the Edmonton-based bank identified Maxium Group with acquisition in mind.

“This acquisition brings an experienced and motivated team of employees, led by a highly respected management group with a demonstrated history of delivering consistently strong financial performance, including solid credit quality,” he said in the news release.

Meanwhile, the purchase will oil the wheels of CWB’s drive to expand its footprint in Eastern and Central Canada, Fowler added. Maxium Group already does more than 80% of its business in Ontario.

Canadian Western Bank (CWB) is a bank offering a range of financial services through more than 40 branch locations in Western Canada. The bank offers Personal banking, business banking and investing services. Personal banking include the provision of bank accounts, mortgages, loans, credit cards, banking services such as online banking, mobile banking and ATM banking, creditor insurance and travel insurance. Business banking includes provision of business lending, business accounts, cash management services, credit cards and services to small businesses. Its investing services include a range of Guaranteed Investment Certificates (GICs), Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), Registered Retirement Income Fund Products (RRIFs), Registered Education Savings Plan (RESP) and mutual funds. More from Reuters »

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