$136-million deal closed.

Equisure changes ownership, founder remains with company

The moment George Hutchinson erected the "Sold" sign on Equisure Financial Network Inc., he erected another sign "Under old management."

An ING Canada Inc. affiliate, co-owned with seven other Canadian insurance brokers, closed a $136-million takeover of Canada's largest publicly-held insurance and financial services network in early December.

But the change in ownership, a move initiated by Equisure's board of directors last March, does not mean a change in operations, says Hutchinson, who will stay as chief executive officer of the company he founded in 1987.

"I'm remaining with the company and we're going forward," Hutchinson says. "We don't expect any significant changes in the future."

The Dutch-based bank, ING, is a world class financial organization with $194 billion US in assets worldwide, and its Canadian operations are a good fit with Equisure. ING Canada is the second largest insurance product manager in Canada.

"They put their money down because of its (Equisure's) success, its location, personality and Northern entrepreneurial spirit," Hutchinson says, noting the success of the North Bay company. Equisure employs more than 120 people in North Bay and almost 700 elsewhere across Canada.

"We have a very, very secure cash flow. We're a very profitable company" and shareholders have been rewarded since the company went public in 1992 at a share price of $1.05, he says. The deal set the share price at $7, at the high end of its price range during the last two years.

In recent years the company has consistently ranked near the top of Canada's fastest growing companies, as measured by revenue growth, 11th in 1999, second in 1998, and fifth the previous year.

For the first nine months of 2000, revenues rose to $60.7 million, an increase of 40 per cent from the same period a year earlier.

In 1999, the last full year for which results are available, the company reported a profit of $5.2 million or 42 cents a share on revenues of $64.7 million, compared to a profit of $3 million on revenues of $8.5 million in 1998.

The sale was initiated to maximize shareholder value and to deal proactively with the likelihood of a takeover offer.

Dot.com and high tech stocks sapped much of the energy of stocks in the financial sector in recent years, making companies like Equisure attractive takeover targets, he adds.

"We knew there was a company biting at our heels," Hutchinson says. Several were interested, "so we got proactive."

A committee examined the company's options and potential suitors, quickly narrowing the list down to ING, an Equisure shareholder since the fall of 1997, holding about 15 per cent of the company.

"This was the best deal on the table for the shareholders," Hutchinson says. Equisure had about 4,500 shareholders across Canada, including about 600 in Northern Ontario.

A tentative deal was reached in August, ING's board approved the offer in late September and by December had acquired 97.3 per cent of the common stock. Hutchinson says he expects ING to take the company private.

Equisure operates regional brokerages across Canada, as well as Equisure Trust Co., Equisure Securities and South Western Insurance group, and efni-Connect, an Internet service provider, and moneyramp.com, an e-commerce financial services company.