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Definity And McDougall Partner With McFarlan Rowlands, Forming A Leading Broker Platform

Published on: Publié le: May 8, 2023 Categories:


  • Acquisition of a prominent broker in southwestern Ontario with a recognized brand, broad operating expertise and track record of profitable growth
  • Combining McFarlan Rowlands with McDougall establishes a leading broker platform with significant scale in Ontario and provides a solid foundation for national expansion
  • Increases earnings from distribution for Definity by approximately 50% and is immediately accretive to Definity's operating ROE and operating EPS1


WATERLOO, ON, May 8, 2023 — McDougall Insurance Brokers Limited ("McDougall"), a subsidiary of Definity Financial Corporation (TSX: DFY), has purchased 100% of the shares of McFarlan Rowlands Insurance Brokers Inc. and affiliated entities ("McFarlan Rowlands") for aggregate cash and share consideration of $232 million, subject to closing and post-closing adjustments. The cash portion of the purchase price was funded through a combination of excess capital and debt. The remaining portion of the purchase price was satisfied by the issuance of shares in McDougall to McFarlan Rowlands shareholders. Definity's ownership interest in McDougall remains at approximately 75% after accounting for all related transactions.

Established in 1896, McFarlan Rowlands is a leading Ontario-based insurance brokerage, with over 200 employees in 18 office locations across southwestern Ontario, and over $200 million in annual premiums. In addition to its property and casualty brokerage operations, McFarlan Rowlands also has expertise in claims adjusting and life and group benefits brokering.

With over $700 million in annual premiums, 670 employees, 56 office locations, robust operating margins, and a track record of sustainable growth, the combination of McFarlan Rowlands and McDougall operations represents a leading broker platform with significant scale in Ontario. The incremental annual distribution income generated from McFarlan Rowlands will increase Definity's aggregate expected operating income from broker investments from approximately $40 million to approximately $60 million, before finance costs, taxes and minority interests. The transaction is expected to be immediately accretive to Definity's operating ROE and operating earnings per share.

"McFarlan Rowlands provides immediate scale and meaningfully advances Definity's broker platform strategy," said Rowan Saunders, President and Chief Executive Officer, Definity. "We now have appropriate scale from which to extend the platform geographically and, with this transaction, we are making strong progress toward creating another billion-dollar business for Definity."

"McFarlan Rowlands is a high-performing brokerage led by a seasoned management team with a well-known brand and a long track record of value creation," stated Ross McDougall, Chief Executive Officer, McDougall. "The Definity and McDougall broker platform model, including its focus on shared ownership, continues to drive strong interest from the broker community."

"Partnering with McDougall makes strong strategic sense given our common focus on exceptional customer service, broad carrier relationships and profitable growth," said Burke Neale, Chief Executive Officer, McFarlan Rowlands. "We are excited about the opportunity to join Definity and McDougall in building a leading broker platform."

The acquisition was completed on May 8, 2023. Definity continues to hold significant financial capacity for future opportunities.

About Definity Financial Corporation

Definity Financial Corporation ("Definity", which includes its subsidiaries where the context so requires) is one of the leading property and casualty insurers in Canada, with over $3.6 billion in gross written premiums in 2022 and over $2.3 billion in equity attributable to common shareholders as at December 31, 2022.2

For further information, please contact:

Media inquiries:

Sarah Attwells
AVP, Corporate Affairs
(C) 226-753-1130

Investor inquiries:

Dennis Westfall
Head, Investor Relations
(C) 416-435-5568

Forward Looking Statements

This news release may contain forward-looking information within the meaning of applicable securities laws, which reflects Definity's current expectations regarding future events, including statements relating to the Acquisition, the accretive impact of the Acquisition on operating ROE and operating EPS, diversification benefits on income, future expected operating income from broker investments, future transactions and acquisitions, impact on Definity's operating income and book value, timing and amount of post-closing adjustments, and impact on Definity's and McDougall's growth plans and McDougall's annual premium base objective, among others. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely", "potential" or the negative or other variations of these words or other similar or comparable words or phrases, are intended to identify forward-looking statements. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Definity's control. Such risks and uncertainties are included in the "Cautionary Note Regarding Forward-looking Information" and "Risk Management and Corporate Governance" sections of Definity's Management's Discussion and Analysis for the year ended December 31, 2022. Actual results could differ materially from those projected herein. Unless otherwise indicated, all forward-looking statements in this press release are made as of May 8, 2023 and are subject to change after that date. Definity does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

Supplementary Financial Measures and Non-GAAP Financial Measures and Ratios

We measure and evaluate performance of our business using a number of financial measures. Among these measures are the "supplementary financial measures", "non-GAAP financial measures", and "non-GAAP ratios" (as such terms are defined under Canadian Securities Administrators' National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure), and in each case are not standardized financial measures under GAAP. The supplementary financial measures, non-GAAP financial measures, and non-GAAP ratios in this news release may not be comparable to similar measures presented by other companies. These measures should not be considered in isolation or as a substitute for analysis of our financial information reported under GAAP. These measures are used by financial analysts and others in the P&C insurance industry and facilitate management's comparisons to our historical operating results in assessing our results and strategic and operational decision-making. For more information about these supplementary financial measures, non-GAAP financial measures, and non-GAAP ratios, including (where applicable) definitions and explanations of how these measures provide useful information, refer to Section 12 – Supplementary financial measures and non-GAAP financial measures and ratios in Definity's Management's Discussion and Analysis for the year ended December 31, 2022, which is available on our website at and on SEDAR at

1This is a supplementary financial measure, non-GAAP financial measure, or a non-GAAP ratio. Please refer to Supplementary financial measures and non-GAAP financial measures and ratios in this news release, and Section 12 – Supplementary financial measures and non-GAAP financial measures and ratios in Definity's Management's Discussion and Analysis for the year ended December 31, 2022 for further details, which is available on the Company's website at and on SEDAR at

2Figures reflect calculation and presentation under IFRS 4.

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