Financial institution First National Financial undergoes a $2.9 billion acquisition, orchestrated by Birch Hill and Brookfield.
First National Financial Corporation, one of Canada's largest non-bank mortgage originators and underwriters, is set to undergo a significant change with the acquisition by an acquisition vehicle controlled by Birch Hill Equity Partners and Brookfield Asset Management. The deal, valued at approximately C$2.9 billion, will see all outstanding common shares of First National purchased for C$48.00 per share in cash.
The acquisition, which represents a premium of 15.2% over the 30-trading day volume-weighted average share price, is expected to close in the fourth quarter of 2025, subject to regulatory, shareholder, and court approvals.
The strategic review by First National resulted in multiple acquisition offers, with the Birch Hill and Brookfield proposal emerging as superior. The founders, Stephen Smith and Moray Tawse, who together hold around 71% of shares, are selling about two-thirds of their holdings for cash and rolling over the remainder into ownership interests in the newly formed acquisition vehicle, Regal Bidco Inc. Post-closing, Smith and Tawse will each retain an indirect stake of approximately 19%.
Birch Hill Equity Partners and Brookfield Asset Management bring expertise in the Canadian financial services industry to the acquisition. Brookfield Asset Management, a major global alternative asset manager with over US$1 trillion under management, is making a significant move into the non-bank mortgage lending sector in Canada with this acquisition.
Jason Ellis, CEO of First National, expresses excitement about the transaction as the start of a new chapter. Ellis will continue as CEO after the acquisition, ensuring a smooth transition for the company.
The legal aspects of the deal are being handled by Davies Ward Phillips & Vineberg LLP, representing Birch Hill and Brookfield, and Torys LLP, which is counsel to First National and separately advised its founders.
The acquisition redirects majority ownership to Birch Hill and Brookfield while preserving founder involvement through minority ownership, confirming First National’s strategic evolution backed by experienced private equity and asset management investors.
The transaction is expected to close in Q4 2025, subject to approvals. The acquisition price represents a premium of 22.8% over the 90-trading day volume-weighted average share price, indicating a positive market response to the deal. The purchase price does not have a financing condition, indicating robust financial backing for the acquisition.
In conclusion, this acquisition marks a significant step for First National Financial Corporation, bringing in experienced investors and setting the stage for future growth and innovation.
Investors Birch Hill Equity Partners and Brookfield Asset Management are bringing their expertise in the Canadian financial services industry to contribute to First National Financial Corporation's future growth and innovation, as they are planned to purchase the company for approximately C$2.9 billion in cash. This strategic acquisition, which is expected to close in Q4 2025, subject to approvals, presents an opportunity for First National to further its investments in the non-bank mortgage lending sector.
