May 31, 2018 / 8:48 PM / a year ago

Scotiabank to buy doctors' wealth services firm for C$2.59 billion

FILE PHOTO: A woman leaves a Scotiabank branch in Ottawa, Ontario, Canada on May 31, 2016. REUTERS/Chris Wattie/File Photo

(Reuters) - Bank of Nova Scotia (BNS.TO) said on Thursday it would buy MD Financial Management, a financial services company for Canadian doctors, in a C$2.59 billion ($2.00 billion) all-cash deal.

MD Financial, which provides investment management and financial planning services, is owned by the Canadian Medical Association (CMA) and has more than C$49 billion in assets under management and administration.

Scotiabank said the deal is expected to be partly financed by a public offering of 19.7 million common shares at C$76.15 per share on a bought-deal basis for gross proceeds of C$1.50 billion.

“Scotiabank will invest C$115 million over the next ten years to support the advancement of the medical profession and health care in Canada,” Chief Executive Officer Brian Porter said in a statement.

The transaction, expected to close in the fiscal fourth quarter, will impact the bank’s Common Equity Tier 1 capital ratio by about 30 basis points.

Scotiabank’s global banking and markets unit and J.P. Morgan served as financial advisers to Scotiabank on the acquisition.

Reporting by Taenaz Shakir in Bengaluru; Editing by Maju Samuel

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