Focus Financial Partners is acquiring a $1.2 billion Canadian wealth management business that operates in both the U.S. and Canada.
The acquisition of Cardinal Point Management and Cardinal Point Wealth Management will represent Focus’ 78th acquisitions, adding to its more than $300 billion of assets under management.
Founded in 2009, Cardinal Point operates a unique cross-border niche advisory practice, with three offices in the U.S. and two in Canada that serve clients with homes and family in both countries.
In addition to an expertise in cross-border tax management and estate planning, Cardinal Point has been growth machine, with assets under management tripling over the past five years.
“Our motivation for partnering with Focus is we are looking at how we can take the business to the next level,” said Jeff Sheldon, Cardinal Point founder and chief executive.
“We also like the idea of maintaining the independence factor, because Focus is not looking to turn us into employees, but they are embracing our entrepreneurial spirit,” Sheldon said.
Rajini Kodialam, Focus co-founder and chief operating officer who leads the international strategy, said Focus has been doing international deals since 2008, but that the Cardinal business “has a unique value proposition.”
“They might be one of the best-integrated firms that is truly integrated cross-border,” she said. “And they have savvy digital marketing.”
Rudy Adolf, Focus founder, chief executive and chairman, in a statement described Cardinal Point as a “clear leader in cross-border wealth management, adding a unique expertise to our partnership as we continue building a portfolio of firms that are highly complementary.”
The deal is expected to close in the fourth quarter; terms were not disclosed.
A company representative confirmed that Focus’ deals typically involve a combination of cash and low-cost debt with free cash flow.
In July, Focus took out a new 7-year term loan for $800 million to help finance growth through acquisitions.
Focus’ stock is up 20.1% since the start of the year, which compares to a 19.3% gain by the S&P 500 Index over the same period.
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