In a move set to reshape the Canadian financial landscape, CI Financial Corp. has announced plans to go private in a C$4.7 billion ($3.4 billion) deal with backing from Mubadala Capital, marking one of the largest privatizations ever undertaken by an Abu Dhabi entity in the financial sector.
Premium Offer for Shareholders
Under the agreement, shareholders of the Toronto-based asset management giant will receive C$32 per share in cash—a 33% premium to the company’s recent closing price. CI Financial will retain its Canadian headquarters, and insiders are expected to roll portions of their shares into the private company, according to the statement released Monday.
Mubadala Capital, the alternative asset management arm of the $1.5 trillion Mubadala Investment Co., has been expanding its global footprint with high-profile acquisitions, including its purchase of Fortress Investment Group earlier this year. However, the CI deal will require approval from Canadian and U.S. regulators, as both countries have tightened scrutiny on foreign investments from state-backed entities.
Cross-Border Challenges
Despite its vast resources, Abu Dhabi-based Mubadala has faced challenges securing international deals. Recent attempts to acquire Standard Chartered Plc and Lazard fell short. The CI acquisition could signal a turning point, but hurdles remain, particularly under Canada’s heightened review processes.
CI Financial’s shares soared 30% to C$31.25 in morning trading on the Toronto Stock Exchange following the announcement.
Strategic Milestone for CI
This move is a crowning achievement for CI’s CEO, Kurt MacAlpine, who has transformed the firm since taking the helm in 2019. His strategy to diversify revenue streams through a series of U.S. acquisitions created a robust wealth management arm but also increased CI’s debt, prompting a downgrade to junk status by S&P Global Ratings last year.
With client assets totaling C$518 billion as of September 30, CI remains one of Canada’s largest mutual fund sellers not tied to a major bank or insurer. MacAlpine emphasized Mubadala’s long-term investment outlook, stating, “Mubadala Capital represents stability and certainty for CI’s clients and employees.”
US Wealth Management Focus
Nearly half of CI’s assets are managed by its U.S. wealth management division, Corient, which includes a vast network of RIAs acquired during a three-year buying spree. While CI previously considered taking Corient public, those plans could now be revisited in 2026.
To manage its debt, CI sold a 20% stake in Corient for $1 billion to investors including Bain Capital and the Abu Dhabi Investment Authority. Mubadala’s latest deal includes up to C$750 million in cash to reduce outstanding preferred equity.
Future Outlook
Including debt, the Mubadala transaction values CI Financial at C$12.1 billion. The company will be delisted from the Toronto Stock Exchange but will remain a reporting issuer in Canada due to its outstanding bonds.
The deal, unanimously approved by CI’s independent directors, includes termination clauses to safeguard both parties. CI would pay a C$150 million fee if the deal falls through under specific circumstances, while Mubadala would owe C$225 million if regulatory or other hurdles prevent the acquisition.
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Adapted from source: "Abu Dhabi’s Mubadala to Take CI Financial Private in $3.4 Billion Deal." Bloomberg, 25 Nov. 2024, www.bloomberg.com/news/articles/2024-11-25/abu-dhabi-s-mubadala-to-take-ci-financial-private-in-c-3-4-billion-deal
