Financier First National is set for a $2.9 billion buyout, orchestrated by Birch Hill and Brookfield.
In an exciting development for the Canadian financial services industry, First National Financial Corporation, Canada's largest non-bank mortgage originator, has been agreed to be acquired by an acquisition vehicle controlled by Birch Hill Equity Partners and Brookfield Asset Management for approximately $2.9 billion.
The acquisition price of $48.00 per share in cash marks a significant premium over the 90-trading day volume-weighted average share price, representing a 22.8% increase. The transaction, which is expected to close in Q4 2025, pending approvals, will see Birch Hill and Brookfield collectively holding about 62% of First National post-acquisition.
Jason Ellis, CEO of First National, expresses his excitement for the new chapter this acquisition represents. 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.
Birch Hill Equity Partners, a Canadian mid-market private equity firm based in Toronto, managing over C$6 billion in capital, brings deep mid-market private equity experience with a focus on operational transformation and data analytics in financial services. Their portfolio includes companies such as Park Lawn Corp., Rexall pharmacies, and Harbour Air Seaplanes, showcasing experience across various sectors including financial services.
Brookfield Asset Management, a global investment management firm managing over US$1 trillion in assets, adds capital efficiency and long-term asset management prowess to the partnership. Known for its expertise in long-term value creation, particularly through infrastructure-like returns, Brookfield's involvement in financial services via large-scale asset management complements Birch Hill's operational efficiency background.
The collaboration aims to enhance profitability by expanding into alternative lending and cross-border markets, leveraging their complementary strengths in private equity and infrastructure investment. First National aims to grow its platform, drive innovation, and deliver for its customers, employees, and institutional partners with the help of Birch Hill and Brookfield.
Jason Ellis will continue as CEO of First National post-acquisition, ensuring a smooth transition and continuity of operations. The acquisition price represents a premium of 15.2% over the 30-trading day volume-weighted average share price, reflecting the market's confidence in the partnership's potential to drive growth and success for First National.
This acquisition highlights Birch Hill and Brookfield's influence in the Canadian financial services and mortgage sectors, with their combined expertise set to drive innovation and growth for First National.
Jason Ellis, as the CEO of First National, will continue to drive the company's growth by focusing on expanding into alternative lending and cross-border markets, leveraging the investment expertise of Birch Hill Equity Partners and Brookfield Asset Management. To achieve this, they plan to invest in the finance and business sectors, with their combined resources facilitating innovation and profitability for First National.
