Announcement • Oct 23
Birch Hill Equity Partners Management Inc, Brookfield Asset Management Ltd. (TSX:BAM), Stephen Smith and Moray Tawse completed the acquisition of First National Financial Corporation (TSX:FN) from Stephen Smith, Moray Tawse and other shareholders.
Birch Hill Equity Partners Management Inc, Brookfield Asset Management Ltd. (TSX:BAM), Stephen Smith and Moray Tawse signed a definitive arrangement acquire First National Financial Corporation (TSX:FN) from Stephen Smith, Moray Tawse and other shareholders for CAD 2.9 billion on July 27, 2025. The consideration consists of CAD 685.07 million common equity of Birch Hill Equity Partners Management Inc. and Brookfield Asset Management Ltd. to be issued for common equity of First National Financial Corporation. A cash consideration of CAD 2.19 billion valued at CAD 48 per share will be paid by Birch Hill Equity Partners Management Inc. and Brookfield Asset Management Ltd. As part of consideration, CAD 2.88 billion is paid towards common equity of First National Financial Corporation. First National Financial has formed a Special Committee of independent directors advised by independent and highly qualified legal and financial advisors. The break fee payable by the Company of CAD 50 million is only payable in limited circumstances such as where the Arrangement Agreement is terminated as a result of a change in the Board's recommendation. The Company is entitled to a reverse break fee of CAD 75 million in certain circumstances, including if the Arrangement Agreement is terminated by the Company as a result of the Purchaser's failure to close.
As a result, on closing of the Transaction, Messrs. Smith and Tawse are each expected to maintain an indirect approximate 19% interest in First National, with Birch Hill and Brookfield holding the remaining approximate 62% interest. Following closing of the Transaction, the Purchaser intends to cause the Shares to be delisted from the TSX. The Preferred Shares will remain listed on the TSX. Jason Ellis is expected to remain First National's Chief Executive Officer and lead the business in all aspects of its operations.
The Transaction is subject to a number of conditions customary for transactions of this nature, including, among others: (i) the approval of at least two-thirds of the votes cast by Shareholders (including the Rolling Shareholders) at a special meeting of Shareholders; (ii) the approval of a simple majority of the votes cast by Shareholders other than the Rolling Shareholders and any other Shareholders required to be excluded pursuant to MI 61-101 at such special meeting; (iii) clearance under the Competition Act (Canada); and (iv) court approval. Completion of the Transaction is not subject to a financing condition. The Company entered into the Arrangement Agreement based on the unanimous approval of the Company's board of directors Transaction is expected to close in the fourth quarter of 2025. As of August 27, 2025 The board of directors of First National Financial special meeting of common shares will be held on September 30, 2025. As on September 30, 2025, the transaction has been approved by First National Financial shareholders. As on October 3, 2025, First National Financial has obtained a final order from the Ontario Superior Court of Justice and the transaction is anticipated to close in October 2025. Competition Act approval has been received and all conditions to closing has been satisfied on October 8, 2025.
RBC Capital Markets, LLC acted as financial advisor for First National Financial Corporation. BMO Capital Markets acted as financial advisor for First National Financial Corporation. Stephen Smith and Moray Tawse, Leah Frank, Richard Willoughby, Steve Rotchtin and Danielle Marjoram, Omar Wakil and Eric Patenaude, Blair Keefe and Eli Monas, Andrew Wong and Benjamin Mann of Torys LLP act as legal advisor for First National Financial Corporation. Alex Moore and Liam Churchill of Blake, Cassels & Graydon LLP acted as legal advisors for First National Financial Corporation. CIBC Capital Markets acted as financial advisor for Brookfield Asset Management Ltd. and Birch Hill Equity Partners Management Inc. Patrick G. Barry, Kevin Greenspoon, Jennifer Prieto, Joseph DiPonio, Jared Solinger, Derek R.G. Vesey, Sarah Elharrar, David Wilson, Christopher Anderson, Olivia Khazam, Jim Dinning, Shari Cohen, Sumeet Dang and Alexander Max Jarvie of Davies Ward Phillips & Vineberg LLP acted as legal advisors for Brookfield Asset Management Ltd. and Birch Hill Equity Partners Management Inc. Birch Hill and Brookfield's debt financing for the transaction was fully underwritten by Canadian Imperial Bank of Commerce, RBC Capital Markets, and TD Securities, as Joint Bookrunners and Co-Lead Arrangers. Initial commitments were also provided by The Bank of Nova Scotia and National Bank of Canada, and will be followed by a general syndication. RBC Dominion Securities Inc. acted as financial advisor First National Financial. BMO Nesbitt Burns Inc. acted as financial advisor and fairness opinion provider to First National Financial. Laurel Hill Advisory Group, LLC acted as a Information agent to First National Financial. Computershare Investor Services Inc. acted as a transfer agent to First National Financial. CDS Clearing and Depository Services Inc. acted as a depository bank to First National Financial.
Birch Hill Equity Partners Management Inc, Brookfield Asset Management Ltd. (TSX:BAM), Stephen Smith and Moray Tawse completed the acquisition of First National Financial Corporation (TSX:FN) from Stephen Smith, Moray Tawse and other shareholders on July 27, 2025.
