Canadian asset manager CI Financial Corp. is selling a 20% stake in its U.S. wealth management unit to a group of investors including Bain Capital and Abu Dhabi Investment Authority.
The $1 billion cash injection gives the business an enterprise value of about $5.3 billion, CI said in a statement that also named Ares Management Corp. and the state of Wisconsin as members of the investor group. The deal was reported first by the Wall Street Journal.
For CI, the transaction means immediate financial relief, allowing it to pay down some of the debt it accumulated when it acquired dozens of wealth management offices across the U.S. as part of a new growth strategy by Chief Executive Kurt MacAlpine. CI announced an offer to purchase its bonds due in 2024, 2025 and 2027.
The Canadian financial firm announced plans last year to take the U.S. division public, but has shelved the IPO for now.
“We capitalized on an opportunity to accomplish in the private markets the objectives we sought in the IPO — value creation for our shareholders, an infusion of capital to materially deleverage, and the opportunity to build relationships with leading long-term investors,” MacAlpine said in the statement.
CI’s net leverage ratio will fall to 2.7 times from 4 times, the company said. The firm’s stock market value, including both its U.S. business and its profitable Canadian fund management arm, was just C$2.3 billion ($1.7 billion) as of Wednesday’s close, according to data compiled by Bloomberg. It has been buying back shares, but executives have expressed frustration at the company’s low valuation as the market has grown more concerned about the debt.
“The CI board is thrilled by the outcome of this transaction, which creates substantial value for our shareholders and represents an attractive alternative to an IPO of CI US,” Chairman Bill Holland said. “We have retained majority ownership of CI US while partnering with world-class investors and adding new directors at CI US.”
Meanwhile, DPL Financial Partners adds two annuity executives and Prime Capital Financial hires a Mid-Atlantic retirement plan consultant
Andrew Komarow pleaded guilty Thursday in federal court in Hartford to defrauding three financial services companies of close to $3.3 million.
Elsewhere, Cetera picks up a $210 million Connecticut team from MML, while Wells Fargo FiNet adds a San Diego family practice from LPL
Celebrity endorsements, $500M in claimed assets, and a state regulator stepping in.
“We needed to become a more agile and efficient organization,” said American Express CEO Stephen Squeri.
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor
