Mubadala to Take Canada’s CI Financial Private

In one of the largest privatisation transactions by an Abu Dhabi entity, Toronto-based Canadian mutual fund manager CI Financial Corp., on Monday said that it has signed an agreement with an affiliate of Mubadala Capital, the alternative asset management arm of Mubadala Investment Company, to take CI private in a transaction that values CI’s equity at approximately $3.4 billion implying an enterprise value of approximately $8.57 billion.

Following the closing of the transaction, CI will continue to operate with its current structure and management team and will be independent of Mubadala Capital’s other portfolio businesses.

All issued and outstanding shares of CI will be acquired for cash consideration equal to $22.66 per share, other than shares held by members of senior management who enter into equity rollover agreements.

The cash purchase price represents a 33% premium to the last closing price prior to the announcement of the transaction and a premium of 58% to the 60-day volume-weighted average trading price on the Toronto Stock Exchange.

William E. Butt, CI’s Lead Director and Chair of the Special Committee, said that this transaction, with its significant cash premium, represented an exceptional outcome for CI shareholders and provides certainty to shareholders while CI pursues its ongoing transformation.

“It also provides significant benefits to Canada, by providing long-term capital to underpin the building of a Canadian champion in the wealth and asset management industries,” he added.

Oscar Fahlgren, Chief Investment Officer of Mubadala Capital, said that they were looking forward to partner with CI’s talented team to capitalise on new opportunities in the asset and wealth management sectors and build on the company’s successes.

The transaction also supports CI’s expansion in the US, where it operates as Corient and will continue to operate independently under the Corient brand.

Benefits to Canada

This transaction will maintain CI’s existing leadership and will result in CI retaining its talented team across CI’s multiple offices in Canada, and will create the opportunity for new hiring in Canada to support growth.

CI will remain headquartered in Canada and existing operations and structure in Canada will stay in place. This includes maintaining CI’s existing technology and data protection practices, including maintaining all personal data in Canada for Canadian operations.

Mubadala Capital’s long-term approach will create a stable, well-funded platform for CI to continue to grow, allowing management greater ability to reinvest into the overall business and strategy.

Transaction Details

The transaction is subject to court approval, regulatory clearances and other customary closing conditions. The transaction is not subject to any financing condition and, assuming the timely receipt of all required regulatory approvals, is expected to close in the second quarter of 2025.

The agreement includes customary terms and conditions, including a non-solicitation covenant on the part of CI, which is subject to “fiduciary out” provisions that enable CI to terminate the agreement in customary circumstances, subject to Mubadala Capital having a right to match any third party superior proposal.

A termination fee of $150 million is payable by CI to Mubadala Capital in certain circumstances, including termination of the agreement by CI pursuant to the “fiduciary out” provisions. A reverse termination fee of $225 million is payable by Mubadala Capital to CI if the transaction is not completed in certain circumstances, including where certain of the required regulatory approvals are not received.

All voting and support agreements terminate automatically upon termination of the definitive agreement or a change of recommendation by CI’s Board of Directors made in accordance with the terms of the definitive agreement. Any equity rollover agreements will terminate automatically upon termination of the definitive agreement.

CI will pay its previously declared regular quarterly dividends on 15 January 2025 and 15 April 2025 to shareholders of record as of 31 December 2024 and 31 March 2025, respectively, but under the terms of the definitive agreement, has agreed to suspend any additional dividends.