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Mubadala Capital to take CI Financial private: Canadian mutual fund manager CI Financial is set to go private in a CAD 4.7 bn (USD 3.4 bn) transaction, backed by Mubadala’s asset management unit, Mubadala Capital, it said in a statement. The transaction, which is subject to regulatory approvals, is expected to close in 2Q 2025. It marks one of the largest privatization transactions by an Abu Dhabi entity in the financial sector, Bloomberg reports. The total agreement, including debt, values CI at CAD 12.1 bn.
The transaction will require approval from CI shareholders, with a special meeting expected in January 2025 to secure at least 66⅔% of votes cast by shareholders. Shareholders owning 16.88% of CI’s outstanding shares have already entered into a voting and support agreement with Mubadala Capital agreeing to vote in favor of the transaction. An independent committee of CI board members also unanimously approved the transaction.
The payout for shareholders: CI shareholders will receive CAD 32 per share in cash, a 33% premium over the previous closing price. After the transaction, CI will delist from the Toronto Stock Exchange, and dividends will be suspended. Mubadala Capital will inject an additional CAD 750 mn in cash at closing to reduce preferred equity.
Not completely out: Despite going private, CI will remain a reporting issuer in Canada due to its outstanding debentures and notes, according to the statement.
What’s next? CI Financial will remain headquartered in Canada, with CEO Kurt MacAlpine continuing to lead the firm under Mubadala’s long-term investment philosophy. Other senior management members will also roll some of their shares into the private entity.
If the agreement falls through: CI will owe Mubadala CAD 150 mn if the transaction fails under certain conditions. Conversely, Mubadala will pay CAD 225 mn if regulatory approval or other conditions delay or block the transaction.
CI Financial has been suffering from accumulating debt: S&P downgraded the company’s debt to junk status in 2023, following a costly restructuring strategy by MacAlpine in 2019. The strategy, focusing on US acquisitions to diversify income, had mixed results. The company, which managed CAD 518 bn in client assets as of September, had previously sold a 20% stake in its US wealth management division Corient to Bain Capital and Abu Dhabi Investment Authority to reduce debt — a transaction that got some criticism for including convertible preferred stock, which Mubadala will now reduce with the CAD 750 mn payout.
ADVISORS- INFOR Financial is the financial advisor to CI’s special committee of independent members of the board, while Wildeboer Dellelce is serving as legal advisor. Stikeman Elliott and Skadden, Arps, Slate, Meagher & Flom are serving as legal advisors to CI, while RBC Capital Markets is also an advisor to CI. Jefferies Securities is Mubadala Capital’s lead financial advisor, with Blake, Cassels & Graydon and Latham & Watkins serving as legal advisors, FGS Longview acting as strategic communications and public affairs advisor, and BMO Capital Markets also acting as advisor.
