Birch Hill and Brookfield-led consortium finalizes First National buyout
First National Financial Corporation’s $2.2 billion acquisition by a consortium led by Birch Hill Equity Partners and Brookfield Asset Management has officially closed, bringing new owners to one of Canada’s largest non-bank mortgage lenders.
Ownership structure and board changes
Under the finalized arrangement, Birch Hill and Brookfield now control approximately 62% of First National, while founders Stephen Smith and Moray Tawse each retain an indirect 19% stake.
The deal saw all outstanding common shares, except those held by the founders, acquired for $48 per share in cash.
The company’s common shares are set to be delisted from the Toronto Stock Exchange, though its preferred shares remain listed and outstanding.
The board of directors expanded from nine to ten members, with Moray Tawse appointed as chair. The senior management team remains unchanged, and an eleventh director is expected to join following an amendment to the company’s articles.
Meanwhile, the acquisition will see no changes to the way mortgage brokers work with First National. Speaking onstage at the weekend's Mortgage Professionals Canada (MPC) national conference in Ottawa, the company's president and chief executive officer Jason Ellis confirmed it was business as usual for the broker community with the lender.
Financing and future plans
As part of the transaction, First National redeemed several senior unsecured notes and is set to complete the settlement of an $800 million senior notes offering. The company and the acquisition vehicle will soon amalgamate, continuing operations under the First National name.
Preferred shares and new notes will remain outstanding, with no changes to their terms.
This acquisition comes amid a period of heightened private equity activity in Canada’s mortgage sector, as institutional investors seek stable returns in a challenging interest rate environment.
First National Financial Corporation manages approximately $155 billion in mortgages under administration as of early 2025, with mortgage originations growing substantially year over year. The company primarily generates revenue through mortgage servicing income and interest earned on securitized mortgages. First National focuses on insured multi-unit mortgage origination along with other commercial and residential portfolios. Operating costs, technology investments, and capital market conditions impact its earnings.
