CIBC Mellon buys Felcom record keeping business from Jovian Capital for $4.2M

By The Canadian Press

TORONTO - CIBC Mellon Global Securities Services is buying the record keeping and fund administration business of Felcom Data Services Inc., a wholly-owned subsidiary of Jovian Capital Corp. (TSX: JOV.TO).

The transaction, expected to close by late October, involves the transfer of Felcom's client contracts for about $4.2 million, subject to adjustments, the two companies announced Thursday.

CIBC Mellon said in a statement it plans to offer employment to the majority of Felcom employees who currently support the record keeping and fund administration business.

"CIBC Mellon's acquisition of these well-integrated services will provide our investment fund clients with a greater array of top-tier services and product offerings that can be bundled and customized to deliver enhanced productivity and ongoing growth," said Thomas MacMillan, CIBC Mellon president and chief executive.

Jovian chief executive Philip Armstrong called CIBC Mellon "a perfect fit for our Felcom business," and added that the transaction "unlocks the hidden value in one of our Jovian assets."

"This is a win-win for Felcom and CIBC Mellon," said Felcom president Ronald Landry. "Felcom's existing clients will benefit from CIBC Mellon's leading custody and other product offerings. In turn, CIBC Mellon's clients will benefit from Felcom's robust technology and the experience of our employees."

Felcom has been providing record keeping and fund administration services to investment fund manufacturers since 2001. It has 17 individual customers with combined assets under administration of some $3 billion.

CIBC Mellon is 50-50 jointly owned by the Canadian Imperial Bank of Commerce and Bank of New York Mellon. It provides financial services for institutions and corporations, including asset servicing, multi-currency accounting, information delivery, securities lending and foreign exchange services in Canada.

Jovian acquires, creates and grows financial services companies specializing in wealth and asset management. The Jovian group of companies manages approximately $13 billion of client assets.

Jovian Capital shares were down eight cents at $5.65 at midday Thursday on the Toronto Stock Exchange.