First National Financial Corporation Secures Court Approval for Acquisition Plan

What's Happening?

First National Financial Corporation has received final court approval from the Ontario Superior Court of Justice for its plan of arrangement. This plan involves the acquisition of all outstanding common shares by a newly-formed acquisition vehicle controlled by private equity funds managed by Birch Hill Equity Partners Management Inc. and Brookfield Asset Management. The acquisition, valued at $48.00 per share in cash, excludes shares owned by the company's founders, Stephen Smith and Moray Tawse. The approval follows a special meeting of shareholders on September 30, 2025, where the arrangement was overwhelmingly approved. The completion of the arrangement is contingent upon clearance under the Canadian Competition Act and other customary closing conditions.

Why It's Important?

This acquisition marks a significant shift in the ownership structure of First National Financial Corporation, one of Canada's largest non-bank mortgage originators and underwriters. The move could potentially impact the company's strategic direction and operational focus, given the involvement of major private equity players. For stakeholders, including employees and clients, the acquisition may bring changes in management practices and business priorities. The deal also reflects broader trends in the financial sector, where private equity firms are increasingly involved in large-scale acquisitions, potentially influencing market dynamics and competitive landscapes.

What's Next?

The next steps involve obtaining clearance under the Competition Act in Canada, which is necessary for the arrangement to proceed. If successful, the acquisition is expected to close in October 2025. Stakeholders will be closely monitoring the regulatory process and any potential changes in business operations post-acquisition. The involvement of Birch Hill and Brookfield could lead to strategic shifts aimed at enhancing the company's market position and financial performance.