(Montreal) Thanks to an update to international accounting standards, iA Financial Group now has five times more cash available for an acquisition in the United States.
Adoption of IFRS 17 accounting standards in January 2023 may seem like an obscure topic, but it has concrete implications for the Quebec company’s potential for growth through acquisitions.
The former industrial alliance has available capital of 1.8 billion. Under the old IFRS 4 standard, the surplus would have been 350 million instead. “It’s big,” commented its President and CEO, Denis Ricard, in an interview on the sidelines of a speech to the Canadian Club of Montreal.
In a ‘simplistic’ way, the leader explains that certain items that the company considered liability must now be considered part of capital.
Under previous standards, iA Financial Group would have had less leeway. “If we wanted to buy a company for 1 billion, we would have had to seek external financing,” he explains. While we’re there, we don’t have to seek outside funding and pay more. »
iA Financial Group is reviewing potential acquisition files with “special” attention to the United States. The company is targeting the two segments in which it already has a presence in the United States: individual insurance and auto dealership mechanical warranties.
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