Narrator: The largest insurance and financial services retailer in Western Canada, the Western Financial Group was acquired by Quebec based Desjardins Financial Group on December 23
ILSTV spoke with Scott Tannas, President of Western Financial Group about the evolution of the acquisition and what the deal means for its customers.
Scott Tannas: We’ve had discussions going on with Desjardins for actually over a year with respect to a partnership at Bank West. We talked quite a bit over the last year about our need at Western Financial Group to bring in a partner into the ownership and operation at Bank West. We just felt, and it was becoming increasingly obvious to us that Bank West was not going to achieve long term viability without a strong partner along side of us who could provide expert banking services, additional capital, access to construction of better products and so on.
Desjardins was first on our list of who we wanted to talk to as a perspective partner and through those discussions, which I would say took the better part of a year, I gather it became kind of obvious to Desjardins that they found Western Financial Group to be a company that had a lot of the attributes that they admire and find in their own organization. The culture is the same. Longer term vision. Strength in smaller communities. Multiple products being the strategy-sell more to one customer.
That ultimately culminated in an offer to our board in mid-December and a result of the due diligence that they had done as we talked about the banking partnership, we were able to come to a conclusion very quickly.
For customers it means more product. The vision that we developed with Desjardins over time was they’ve got terrific, strong products in areas like a really unique credit card offering that has some very valuable and innovative uses, annuities, universal life insurance, product areas where we have very little or very limited or none but where there’s demand from customers and a need from customers. So there will be more product and better product in certain financial services areas.
In the key areas of insurance brokerages the business will carry on undisturbed. So the idea of open market and customer choice, which is the strength Western Financial Group brings to customers, that will carry on and that was something that was made clear to us right off the bat by the folks at Desjardins. They are not interested in changing what has been a recipe for success at Western, they are interested in enhancing it. They are also interested in maintaining the brand and so from the date of closing forward, customers will not notice a difference.
The objective, particularly with the core business of home, auto, farm and small business insurance, is to maintain open-market, customer choice. We’ve had discussions with our insurer partners right off the bat to provide assurances to them that their product flow within our network will not be disturbed.
For us obviously a key consideration is employees, and our employees, particularly those at the front line, there will be no difference.
They’ve asked if I would be willing to stay and I said, ‘Of course I was’. I’m a relatively young guy with a keen interest in seeing the business continue to grow and be part of the growing of the business.
Narrator: Desjardin paid $443 Million, or $4.15 per share to acquire Western Financial Group. Scott explains what this means for shareholders.
Scott Tannas: Well, I think it’s a good result. It’s more than an ten-fold increase from our IPO price fifteen years ago, so in terms of those that participated in the founding of the initial public offering of the company, it’s a terrific result. For those that have participated in the equity financing throughout it’s at a price that’s higher than any equity offering that we did in our history. It’s a price that is thirty-some percent higher than our book value, which is also a key measurement.
We think by virtually every measurement we can come up with it’s a good result for shareholders and certainly that’s the message I’m receiving and have received through emails and phone messages through the holidays.
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