First National Financial Corp to Be Acquired by Birch Hill and Brookfield

In a significant development in the Canadian financial sector, First National Financial Corporation, a leading mortgage finance institution, has announced its acquisition by Birch Hill Equity Partners and Brookfield Asset Management. This strategic move is set to reshape the landscape of the Thrifts & Mortgage Finance industry.

Acquisition Details

On July 27, 2025, First National Financial Corporation revealed that it had entered into a definitive arrangement agreement with Regal Bidco Inc., an acquisition vehicle controlled by Birch Hill and Brookfield. Under the terms of the agreement, Regal Bidco will acquire all outstanding common shares of First National, excluding certain shares held by the company’s founders, for $48.00 per share in cash. This price represents a premium over the company’s close price of $42.48 on July 24, 2025, and is notably higher than the 52-week low of $35.21, reflecting the value investors see in this transaction.

Founders Maintain Minority Ownership

A key aspect of the acquisition is the continued involvement of First National’s founders, Stephen Smith and Moray Tawse. Both founders, who have been instrumental in the company’s growth, will sell approximately two-thirds of their current shareholdings for the same cash consideration as other shareholders. Importantly, they will retain minority ownership by exchanging their remaining shares for ownership interests in the Purchaser. This arrangement ensures that Smith and Tawse will remain influential in the company’s future direction.

Market Reaction and Implications

The acquisition is expected to have significant implications for the market. With a market capitalization of 2.58 billion CAD, First National’s integration into the portfolios of Birch Hill and Brookfield could enhance its operational capabilities and market reach. The involvement of these prominent private equity firms suggests a strategic interest in expanding their footprint in the Canadian mortgage finance sector.

Conclusion

As First National Financial Corporation transitions into a new phase under the stewardship of Birch Hill and Brookfield, stakeholders are keenly watching the potential synergies and growth opportunities that may arise. The continued involvement of its founders, Stephen Smith and Moray Tawse, provides a sense of continuity and stability, reassuring investors and clients alike. This acquisition marks a pivotal moment for First National, promising to bolster its position in the competitive landscape of financial services.