Brookfield and Birch Hill to Acquire First National Financial in $2.9 Billion Deal
Brookfield Asset Management and Birch Hill Equity Partners have made a deal to buy a 62% stake in First National Financial Corp. for about $2.9 billion. They will purchase the mortgage company for $48.00 per share in cash, which is 15% more than the average share price over the past 30 days.
What the Deal Means for First National
First National, a key player in Canada’s mortgage market, has received support from its founders, Stephen Smith and Moray Tawse. As part of the acquisition, the founders will sell about two-thirds of their shares. This will reduce their ownership to around 19% each. The deal is expected to close in the fourth quarter of 2025. The company will continue operating under CEO Jason Ellis, marking a new chapter.
Strategic Review and the Road to Acquisition
The acquisition follows a strategic review of First National’s options, which included talks with several potential buyers. The review, led by RBC Dominion Securities Inc., resulted in multiple proposals, with Brookfield and Birch Hill submitting the highest bid.
Jaeme Gloyn, an analyst at National Bank Financial Inc., stated that the deal offers a “compelling valuation” for First National’s shareholders, ensuring immediate liquidity for those involved.
The deal includes a $48 per share cash offer, representing a 15.2% premium to First National’s average share price. This offer is well above the company’s 52-week high and provides significant value to its shareholders.
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Next Steps for First National
Once the deal is complete, First National will continue its regular operations. The company’s preferred shares will remain listed on the Toronto Stock Exchange (TSX). The acquisition will not affect the Series 1 and Series 2 Preferred Shares, which will stay outstanding.
Jason Ellis, CEO of First National, expressed confidence about the future. He believes the partnership with Brookfield and Birch Hill will drive innovation, helping the company grow and improve its services for clients.
Approval Process and Timeline
The deal is set to be finalized in the fourth quarter of 2025, subject to regulatory approval, shareholder approval, and a court ruling. Shareholders will vote on the transaction in September 2025, after which the acquisition will be subject to final approvals. Notably, Stephen Smith and Moray Tawse, the company’s founders, have already entered into voting agreements to support the acquisition.
Once finalized, Brookfield and Birch Hill will delist First National shares from the TSX, and the company will operate as a private entity.
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What do you think this acquisition means for the future of First National? Do you believe the partnership will help the company grow? Share your thoughts below.
More…
- https://www.theglobeandmail.com/business/article-first-national-brookfield-birch-hill
- https://www.newswire.ca/news-releases/first-national-financial-corporation-agrees-to-be-acquired-by-birch-hill-equity-partners-and-brookfield-with-existing-shareholders-stephen-smith-and-moray-tawse-maintaining-minority-ownership-888046675.html
- https://ca.finance.yahoo.com/news/birch-hill-brookfield-buying-first-113444125.html
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