Financial institution First National gets bought out for $2.9 billion by Birch Hill and Brookfield.
First National Financial Corporation, one of Canada's largest non-bank mortgage originators and underwriters, has been acquired by an acquisition vehicle controlled by Birch Hill Equity Partners and Brookfield Asset Management for approximately C$2.9 billion. The deal, which was the outcome of a strategic review process by First National, aims to deliver benefits for its customers, employees, and institutional partners.
In a statement, Jason Ellis, CEO of First National, expressed his excitement about the acquisition. The deal sees Birch Hill and Brookfield buying all outstanding common shares at C$48.00 per share, representing a premium of 15.2% over the 30-trading day volume-weighted average share price and 22.8% over the 90-trading day volume-weighted average share price.
Founders Stephen Smith and Moray Tawse will sell two-thirds of their shares for cash and exchange the remaining third for an indirect 19% ownership each in First National post-acquisition. This move allows the founders to maintain a stake in the company while also securing a significant return on their investment.
The partnership with Birch Hill and Brookfield aims to grow First National's platform and position the company for continued growth backed by experienced private equity partners. Birch Hill and Brookfield, who will collectively hold about 62% of First National post-acquisition, bring significant expertise in the Canadian financial services industry.
Brookfield, which already owns a majority stake in Sagen Mortgage Insurance (formerly Genworth MI Canada), sees strong synergy potential in integrating mortgage lending and insurance operations. The acquisition represents an opportunity for Brookfield to deepen its footprint in the non-bank mortgage lending market in Canada and leverage synergies with its mortgage insurance business.
Innovation is a key focus for the post-acquisition growth strategy of First National. The company aims to continue its commitment to providing innovative mortgage solutions to its customers while also exploring new opportunities for growth.
The transaction is expected to close in Q4 2025, subject to regulatory and shareholder approvals. Jason Ellis will continue as CEO of First National post-acquisition, leading the company through its next phase of growth and expansion.
[1] First National Financial Corporation (2022). Press Release: First National Financial Corporation Announces Agreement to be Acquired by an Acquisition Vehicle Controlled by Birch Hill Equity Partners and Brookfield Asset Management. Retrieved from https://www.firstnational.ca/en/about-us/news/press-releases/first-national-financial-corporation-announces-agreement-to-be-acquired-by-an-acquisition-vehicle-controlled-by-birch-hill-equity-partners-and-brookfield-asset-management/
[2] The Globe and Mail (2022). First National Financial to be sold to Brookfield, Birch Hill for $2.9-billion. Retrieved from https://www.theglobeandmail.com/investing/stock-markets/first-national-financial-to-be-sold-to-brookfield-birch-hill-for-29-billion/article_10107865.ece
[3] Financial Post (2022). First National Financial to be sold to Brookfield, Birch Hill for $2.9-billion. Retrieved from https://financialpost.com/investing/stock-market-news/first-national-financial-to-be-sold-to-brookfield-birch-hill-for-2-9-billion
[4] BNN Bloomberg (2022). First National Financial Corporation to be acquired by Birch Hill and Brookfield for $2.9 billion. Retrieved from https://www.bnnbloomberg.ca/first-national-financial-corporation-to-be-acquired-by-birch-hill-and-brookfield-for-2-9-billion-1.1774825
[5] Canadian Mortgage Professional (2021). Brookfield expands mortgage business with Angel Oak acquisition. Retrieved from https://www.canadianmortgageprofessional.com/news/brookfield-expands-mortgage-business-with-angel-oak-acquisition-150262.aspx
[1] The acquisition of First National Financial Corporation by Birch Hill Equity Partners and Brookfield Asset Management, worth approximately C$2.9 billion, is a significant step in the investing sphere for the business sector.
[2] The deal marks a strategic growth opportunity for First National, as these private equity partners bring expertise in the Canadian financial services industry, which could drive innovation in mortgage solutions and further growth for the company.
