The CA$7.25 price per share represents a 107% premium to NexGen’s closing share price of CA$3.50 on October 23, 2014, the last trading day before announcement of the transaction.

NexGen is a Toronto-based asset manager with more than CA$919 million (as of Sept. 30, 2014) in assets under management and a broad distribution platform.

Rationale for the Transaction

"NexGen is an innovative firm with a strong management team and a solid lineup of retail mutual funds offered through an expansive distribution platform," said John Hailer, chief executive officer of Natixis in the Americas and Asia. "We are honored to build on the legacy James Hunter established in one of the largest retail markets in the world. Together with NexGen, we will be better positioned to serve the market with our worldwide network of affiliated investment managers."

Natixis manages more than $930 billion (as of June 30, 2014) in assets through its global affiliates and was selected as the top U.S. mutual fund family based on an evaluation of 2013 performance, according to the annual Barron’s/Lipper ranking of U.S. mutual fund families. The firm is headquartered in Paris and Boston with offices around the world. Natixis plans to build upon NexGen’s existing mutual fund platform by selectively offering its broad range of asset management strategies into the Canadian retail market.

"We are very pleased to join one of the world’s leading asset managers," said Abe Goenka, NexGen co-CEO. "It’s exciting to become part of an organization with significant resources and an outstanding group of affiliated asset managers. This gives us greater access to a broad set of investment strategies that will allow us to create new products adding to our already diverse fund offerings, allowing us to better serve current clients and pursue new opportunities."

Expanding into Canada is part of Natixis’ strategic plan to actively pursue international growth. In June, the firm announced plans to launch a new business development initiative in Canada focused on tapping into the steadily growing Canadian institutional market. In 2013, the firm established its retail platform in the UK, adding personnel and launching several mutual funds registered for the UK.

NexGen is recognized for offering tax-efficient wealth management strategies. Their patent pending proprietary mutual fund structure is designed to achieve a number of tax planning objectives that are not publicly offered by any other Canadian mutual fund company. The firm distributes through more than 1,600 financial advisors and more than 100 dealers throughout Canada.

Transaction Details

The transaction will be completed by way of a statutory plan of arrangement pursuant to the Business Corporations Act (Ontario). Upon receipt of the unanimous recommendation of the special committee of independent directors, the NexGen board approved the transaction and has resolved to recommend that NexGen shareholders vote in favor of the transaction at a special meeting of the shareholders to approve the transaction. Blair Franklin Capital Partners Inc. has provided an opinion to the NexGen board of directors and special committee that, as of October 24, 2014, the consideration under the proposed transaction is fair, from a financial point of view, to NexGen’s shareholders.

Completion of the transaction is subject to customary closing conditions, including Ontario court approvals, a favorable vote of at least two-thirds of the votes cast by NexGen shareholders and applicable regulatory approvals.

In connection with the execution of the arrangement agreement, shareholders who collectively own over 50% of NexGen’s issued and outstanding common shares have entered into agreements with Natixis pursuant to which they have agreed, among other things, that they will vote all of their NexGen common shares in favour of the transaction, unless the arrangement agreement is terminated in certain circumstances.

The arrangement agreement includes customary non-solicitation provisions applicable to NexGen and provides for the payment of a CA$1.75 million break-up fee to Natixis if the transaction is terminated in certain circumstances.

NexGen will seek approval for the transaction from its shareholders at a special meeting, which it expects will be held close to yearend. In connection with the meeting, NexGen will mail an information circular to its shareholders providing further details of the transaction.

The proposed transaction will constitute a change of control of NexGen Financial Limited Partnership, the manager of the NexGen mutual funds, and investors in the NexGen funds will be sent notice of the change of control.

In keeping with the Natixis multi-affiliate business model, NexGen will operate autonomously with the existing senior management team. There are no immediate plans to make staffing changes or changes to the NexGen business model.

Assuming timely receipt of all necessary court, shareholder and regulatory approvals and the satisfaction of all other conditions, closing is expected to occur in January 2015.

Advisors

Blair Franklin Capital Partners Inc. is acting as financial advisor to NexGen and Goodmans LLP is acting as legal counsel to NexGen.

Borden Ladner Gervais LLP is acting as legal counsel to Natixis.