Other deals include Ontario Teachers' in two crossborder deals including the renewable sector
Torys and Stikeman Elliott are serving as legal counsel in the $2.27 billion (US$1.7 billion) M&A deal between two of Canada’s largest alternative lenders. Also in this week’s deals roundup is Ontario Teachers' Pension Plan Board involved in two cross-border deals in the renewable energy and lottery sectors.
Home Capital to sell to Smith Financial for $2.27 billion
Home Capital Group Inc., a Toronto-based alternative mortgage lender, has agreed to sell to Smith Financial Corporation, a company controlled by First National Financial Corp. chair and co-founder Stephen Smith, in a deal that values the company at approximately $2.27 billion (US$1.7 billion).
Stephen Smith is also the largest shareholder of EQB Inc., formerly Equitable Group Inc., which provides residential and commercial real estate lending services and personal banking.
Upon deal completion, the two giants in Canada’s alternative lending sector will merge under the same umbrella.
Torys LLP is serving as legal counsel to Home Capital, BMO Capital Markets and TD Securities as financial advisors, and Deloitte LLP as independent financial advisor to Home Capital’s board of directors.
Stikeman Elliott LLP is serving as legal counsel to SFC, and RBC Capital Markets as financial advisor.
Home Capital chair of the board of directors, Alan Hibben, said, “The Board, together with our financial and legal advisors, conducted a thorough review of the proposal from SFC and concluded that the transaction is in the best interests of the company and fair, from a financial point of view, to shareholders. We are pleased to have reached an agreement that provides shareholders with compelling and certain value in the form of an all-cash offer.”
Home Capital president and CEO, Yousry Bissada, added, “This transaction represents tangible recognition of the value and strength of our organization. We look forward to this exciting new chapter for Home Capital.”
“With its talented workforce, diversified presence across Canada, trusted positions as a lender and deposit-taker and 36-year operating history, Home Capital is a strategic asset,” said Smith. “Having followed the development of the business for three decades, I can attest to Home Capital’s strong partnerships with mortgage brokers and great customer relationships. I’m also impressed with the direction the Company has taken to build quality assets and enduring advantages in its chosen industry segments. I look forward to owning another business with a bright future.”
The deal is expected to close in mid-2023, subject to customary closing conditions.
Ontario Teachers' invests $1.07 billion in NextEra’s renewable energy assets acquisition
Ontario Teachers' Pension Plan Board agreed to invest $1.07 billion (US$805 million) in US-based NextEra Energy Partners. The investment will be used to fund NextEra’s acquisition of renewable energy assets.
The assets include 49 percent interest in Emerald Breeze, a holding company which owns wind and solar facilities in Texas, Oklahoma, New York, and Nevada. The facilities are Great Prairie Wind, Appaloosa Run Wind, Eight Point Wind, and Yellow Pine Solar.
Other assets in the deal are 100 percent indirect membership interests in wind generation facilities Elk City Wind II, located in Oklahoma, Iowa-based Sac County Wind, and Nebraska-based Sholes Wind.
“The acquisition of the high-quality, long-term contracted renewable energy assets further enhances the diversity of the partnership's existing portfolio,” said NextEra Energy Partners chairman and CEO, John Ketchum. “Combining this acquisition with the recapitalization of six existing NextEra Energy Partners' assets through the convertible equity portfolio financing with a global infrastructure investor is expected to provide significant benefits for unitholders, including a low cash coupon and the ability to retain upside from the share price appreciation for up to 10 years. This significant access to low-cost capital leaves NextEra Energy Partners uniquely positioned to take advantage of the transformation underway in the energy industry and meet its long-term growth objectives.”
Ontario Teachers' to sell Camelot UK Lotteries to Allwyn
Ontario Teachers’ Pension Plan Board agreed to sell Camelot UK Lotteries Limited, the current operator of the UK National Lottery under the Third Licence that runs until 31 January 2024, to Europe’s leading lottery operator, Allwyn.
Earlier this year, the Gambling Commission awarded Allwyn the Fourth Licence to operate the UK National Lottery from 1 February 2024.
Nick Jansa, Executive Managing Director for Europe, Middle East and Africa at Ontario Teachers’, said, “We are proud to have been a strong supporter and partner of the National Lottery over the past 12 years. We believe this sale best positions the National Lottery for a smooth transition to the Fourth Licence operator and wish Allwyn every success. I want to express my sincere thanks to Camelot’s management and employees for their tremendous efforts in successfully running the National Lottery over the last decade, including achieving record revenues to good causes in the last year.”
“Allwyn and Camelot share a common goal: a passion to protect and improve the UK National Lottery, and the good causes it celebrates,” said Robert Chvátal, CEO of Allwyn. “Common ownership of the operators of both the Third and Fourth Licences will help ensure the successful delivery of the National Lottery both in 2023 and over the next decade. Allwyn is committed to making the National Lottery better, raising more for good causes and improving player protection. This deal strengthens the transition process and helps support Allwyn in achieving its vision for the National Lottery.”
The deal is expected to close in the first quarter of 2023, subject to regulatory approvals, including from the Gambling Commission.
