Financial company First National struck a $2.9 billion deal with Birch Hill and Brookfield for a takeover.
In a significant move, private equity firms Birch Hill Equity Partners and Brookfield Asset Management have agreed to acquire First National Financial Corporation for approximately $2.9 billion. The deal, announced in July 2025, will see the two firms take a controlling stake in First National through a newly-formed acquisition vehicle named Regal Bidco Inc.
The acquisition values First National’s shares at C$48.00 per share, representing a 15.2% premium over the average of the past 30 trading days and exceeding the 52-week high for the company, although it was below its 2021 peak share price of over C$52.
Upon closing, expected in Q4 2025 after regulatory and shareholder approvals, Birch Hill and Brookfield will own about 62% of First National. The remaining shares will be held by the founders, Stephen Smith and Moray Tawse, who have agreed to sell roughly two-thirds of their stakes for cash and roll over the remaining shares into ownership interests in the purchaser. This move will result in each founder retaining an indirect approximate 19% ownership in First National post-acquisition.
The transaction structure involves an arrangement agreement, where Regal Bidco offers to acquire all outstanding common shares excluding those rolled over by the founders.
The strategic rationale behind the deal follows a comprehensive review by First National, which received several acquisition proposals. The offer from Birch Hill and Brookfield was deemed more compelling in terms of value and liquidity to shareholders.
This acquisition marks Brookfield’s significant move into the Canadian non-bank mortgage origination sector. By partnering with Birch Hill, they will acquire one of the country’s largest non-bank mortgage lenders. The deal also retains the active involvement of First National’s founders through minority ownership.
The partnership between First National and Birch Hill/Brookfield aims to grow the platform, with innovation being a key focus for the post-acquisition plans of First National.
Jason Ellis, CEO of First National, expressed his excitement about the acquisition, stating that it marks a new chapter for the company. He also noted that Birch Hill and Brookfield are bringing significant expertise in the Canadian financial services industry.
The transaction is expected to close in Q4 2025, pending approvals. Jason Ellis will continue as CEO of First National post-acquisition.
In this transaction, Birch Hill Equity Partners and Brookfield Asset Management are delving into the world of finance and business by acquiring First National Financial Corporation, a significant move in the Canadian non-bank mortgage origination sector. Upon closing, these firms will own approximately 62% of First National, while the founders, Stephen Smith and Moray Tawse, will retain an indirect approximate 19% ownership in First National through rolled-over shares.
