Mubadala Capital to take Canada’s CI Financial private in $8.7bn deal

The all-cash transaction is expected to close by the second quarter of next year

Mubadala Capital aims to strengthen CI’s expansion strategy, particularly in the US. Victor Besa / The National

Mubadala Capital, the investment arm of Abu Dhabi’s sovereign wealth fund Mubadala Investment Company, is taking CI Financial private in an all-cash deal that gives the Canadian asset management firm an enterprise valuation of 12.1 billion Canadian dollars ($8.66 billion), including debt.

The transaction, unanimously approved by CI’s board and a special committee of independent directors, values the Canadian firm's equity at 4.7 billion Canadian dollars, the two sides said on Monday.

Shareholders will receive 32 Canadian dollars per share, marking a 33 per cent premium over CI’s last closing price and a 58 per cent premium over its 60-day volume-weighted average trading price on the Toronto Stock Exchange.

Shares held by members of senior management who enter into equity rollover agreements will be excluded, the companies said.

CI’s Canadian headquarters, management team and operational structure will remain intact, with chief executive Kurt MacAlpine continuing to lead the company. The existing technology and data protection practices will also be preserved, ensuring all personal data for Canadian operations remains stored within Canada.

“We are fully aligned with the strategy and direction of the firm and look forward to working with the CI management team to continue to build this outstanding business,” said Hani Barhoush, managing director and chief executive of Mubadala Capital.

Mubadala Capital is the wholly-owned asset management subsidiary of Mubadala Investment Company, overseeing $24 billion of assets under management, of which $13 billion is managed in third-party capital vehicles.

Established in 2011, the company operates four integrated businesses that include private equity, venture capital and alternative solutions, in addition to a Brazil-focused investment business.

Oscar Fahlgren, chief investment officer of Mubadala Capital, said the company aims to capitalise on “new opportunities in the asset and wealth management sectors” through its latest partnership.

Mubadala Capital invests with a long-term outlook and represents long-term capital – providing stability and certainty for CIʼs clients and employees, Mr MacAlpine said.

Founded in 1965, CI Financial is a diversified global asset and wealth management company operating mainly in Canada, the US and Australia. It manages, advises on and administers more than $518 billion in client assets as of September 30. In September 2021, it also announced the establishment of its US headquarters in Miami.

As per its latest deal, Mubadala Capital aims to strengthen CI’s expansion strategy, particularly in the US, where its operates as Corient. The transaction maintains Corient's structure and its private partnership model, which includes 250 colleagues as equity partners in the firm.

Pending shareholder, regulatory and court approvals, the deal is expected to close by the second quarter of next year.

CI’s shares will be delisted from the Toronto Stock Exchange, though its debentures – debt instrument or loan agreement that a company issues to raise capital – will remain outstanding.