First National Financial To Be Acquired By Birch Hill Equity Partners, Brookfield In C$2.9 Bln Deal

(RTTNews) - First National Financial Corp. (FN.TO) announced on Sunday that it has entered into an agreement with Regal Bidco Inc., a newly formed acquisition vehicle controlled by private equity funds managed by Birch Hill Equity Partners Management Inc. and Brookfield Asset Management. Under the terms of the agreement, Regal Bidco will acquire all outstanding common shares of the Company—excluding the Rollover Shares—for C$48.00 per share in cash. The Purchase Price implies an aggregate total equity value of approximately C$2.9 billion, inclusive of the Rollover Shares.

As part of the transaction, the Company's founders, Stephen Smith and Moray Tawse (collectively with their associates and affiliates, the "Rolling Shareholders"), who currently hold approximately 37.4% and 34.0% of the outstanding Shares, respectively, will each sell roughly two-thirds of their holdings for the same cash consideration per Share as other shareholders. The remaining Shares or the "Rollover Shares" will be exchanged for ownership interests in the Purchaser.

As a result, on closing of the transaction, 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.

The Transaction is expected to close in the fourth quarter of 2025, subject to obtaining the required shareholder, court and regulatory approvals and the satisfaction of other customary closing conditions.

The Purchase Price represents a premium of approximately 15.2% and 22.8% to the 30 and 90-trading day volume weighted average trading price, respectively, of the Shares on the Toronto Stock Exchange on July 25, 2025, the last trading day prior to the announcement of the Transaction.

First National intends to continue paying its regular monthly cash dividend of C$0.208334 per Share in the ordinary course through to closing of the Transaction and regular quarterly dividends on the Preferred Shares in accordance with their terms.