What's Happening?
First National Financial Corporation has completed a plan of arrangement under the Business Corporations Act of Ontario. This arrangement involved a newly-formed acquisition vehicle controlled by private equity funds managed by Birch Hill Equity Partners
Management Inc. and Brookfield Asset Management acquiring all outstanding common shares of First National, except those owned by the company's founders, for $48.00 per share in cash. As a result, the founders retained an indirect 19% interest, while Birch Hill and Brookfield hold the remaining 62%. The company's senior unsecured notes were redeemed, and the shares are expected to be delisted from the Toronto Stock Exchange. The company plans to amalgamate with the purchaser, continuing as First National Financial Corporation, with preferred shares and new notes remaining outstanding.
Why It's Important?
This acquisition marks a significant shift in ownership and control of First National, impacting shareholders and the company's market presence. The delisting of shares from the Toronto Stock Exchange could affect liquidity and investor access. The involvement of major private equity firms like Birch Hill and Brookfield suggests a strategic interest in First National's operations and potential growth. The arrangement also reflects broader trends in the financial sector, where private equity plays a growing role in corporate acquisitions. Shareholders and noteholders must navigate the changes in ownership and the implications for their investments.
What's Next?
Following the completion of the arrangement, First National will proceed with the amalgamation with the purchaser, maintaining its operations under the same name. The company will continue to be a reporting issuer under Canadian securities laws, and its preferred shares will remain listed on the TSX. Shareholders and noteholders are advised to submit necessary documentation to receive their consideration. The company's management and board of directors have been adjusted, with plans to further expand the board. Stakeholders will be monitoring the integration process and any strategic changes implemented by the new ownership.
