Novacap's recent acquisition of a minority holding in AGA Financial Group is powering the group insurance and pension firm’s plans to expand across Canada, Martin Papillon, President and CEO and co-owner of AGA and Marcel Larochelle, Managing Partner, Financial Services, at Novacap, told the Insurance Portal.
The two executives confirm that this acquisition had been in the works for nearly eight months. They view Canadian group insurance distribution as “fragmented” because the market comprises numerous small players. This context signals a growth opportunity for AGA Financial Group and for the investors of the Novacap Financial Services I fund, headed by Larochelle.
“We are still a regional player. We are mainly present in Quebec. Our objective went beyond simply seeking capital. What we wanted, to accelerate our development and make us a national firm, was to find a partner that could propel our corporate development,” Papillon explains.
Corporate development entails identifying acquisition targets and negotiating purchase agreements, he adds. “This is not our specialty. We are a good operator,” he says, adding that Novacap can provide this expertise.
Seeking complementarity
AGA Financial Group will be looking to acquire group insurance companies. However, it will not exclude companies operating in complementary fields.
“We also practice in group retirement, but it’s definitely less developed. So this segment could be interesting for us. The geographic complement also interests us because we are mainly in major centres such as Montreal and Quebec City. The important thing is to have entrepreneurs whose consulting philosophy is similar to ours and who offer their clients quality services. If we share the same values, integration will be smooth,” Papillon says.
AGA’s customer strategy will not change, Papillon adds. “We don't want to spread ourselves too thin. Our goal is to make it easier to access and manage group insurance and pensions.
By consolidating the market, the firm can augment its service offering, he adds.
