First National Financial to Be Acquired by Birch Hill & Brookfield - InforCapital

First National Financial Corporation has agreed to be acquired by Birch Hill Equity Partners and Brookfield Asset Management in a deal that values the Canadian mortgage lender at approximately CAD $2.9 billion. Under the terms of the agreement, all common shares not held by the company’s founders will be purchased for $48.00 per share in cash, representing a premium of over 22 percent to the 90-day average share price.

The acquisition is being executed through Regal Bidco Inc., a new vehicle formed by Birch Hill and Brookfield. The founders, Stephen Smith and Moray Tawse, who currently own a combined 71.4% of the company, will each sell about two-thirds of their holdings and roll the remainder into equity in the acquiring entity. Post-transaction, they are expected to retain approximately 19% ownership each, with the remaining 62% owned by Birch Hill and Brookfield.

The deal follows a strategic review process led by an independent special committee of the board and financial advisor RBC Capital Markets. The committee received multiple bids and chose the Birch Hill–Brookfield proposal for its value and certainty. BMO Capital Markets provided both a fairness opinion and formal valuation, finding the transaction fair and valuing the shares in the range of $44.00 to $50.00.

As part of the transaction, the company’s preferred shares will remain listed on the Toronto Stock Exchange, and First National will continue as a reporting issuer in Canada. The company’s outstanding senior unsecured notes will be redeemed at closing, and regular dividends are expected to continue through to completion of the deal.

CEO Jason Ellis will remain in his role and continue to lead First National’s operations. The current leadership team is also expected to stay in place post-acquisition. A shareholder meeting is planned for September 2025 to approve the transaction, which is expected to close in the fourth quarter of the year, subject to customary approvals including shareholder, court, and regulatory clearances.

The acquisition marks a major private equity investment in Canadian financial services and demonstrates continued institutional interest in scaled mortgage origination platforms with steady cash flows and defensible market positions.