Desjardins Group, Canada's largest cooperative with nearly $200 billion in assets, announced it will purchase up to 40% of outstanding shares of Qtrade Financial Group, an online brokerage platform.
The agreement is between the credit union's subsidiary, Desjardins Financial Corporation Inc., and Qtrade, which has provided brokerage and wealth management platforms, services and solutions to more than 180 credit unions and other financial institutions across Canada since 1999. The firm said it oversees approximately $7.5 billion of client assets.
The Vancouver-based Desjardins said it will initially purchase between 25% and 40% of the outstanding shares of Qtrade from current security holders and has the right to buy the remaining shares over the next six years.
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The transaction is part of Desjardins' strategic plan to grow its major business lines, the cooperative said. Upon the arrangement becoming effective, Qtrade, headquartered in Vancouver, will continue to operate independently with current leadership and under its own brand name, according to Desjardins.
"This partnership will provide a number of other benefits over time for our members and clients. For example, pooling our respective expertise and streamlining our processes, especially in the area of information technology, are key advantages in this ever-changing industry," said Monique Leroux, chair of the board and president/CEO of Desjardins Group.
The strategic partnership will allow Qtrade to continue its work accelerating Canadian credit union success in wealth management, including delivering products featuring socially responsible investing principles, said Scott Gibner, CEO of Qtrade.
"We are proud to partner with Desjardins, one of the world's leading cooperative financial institutions, and to more directly participate in the Canadian credit union system," Gibner said.
The required approvals have been received from the boards of both organizations for the transaction, according to Desjardins and Qtrade.
The deal is expected to close during the second quarter of 2013, and remains subject to customary closing conditions including court, shareholder and regulatory approvals.
"Qtrade has an excellent online trading platform and an expertise which complements that of our subsidiary, Disnat. The activities of both entities give us a much stronger presence in online brokerage enabling us to best serve our members and clients," said Denis Berthiaume, senior vice president of wealth management and life and health insurance for Desjardins.
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