The remaining shares in Genworth MI Canada will be acquired by Brookfield at a price of $33 per share
Brookfield to buy remaining 43% stake in Genworth MI Canada. (Credit: Tumisu from Pixabay)
Brookfield Business Partners along with some of its affiliates and institutional partners will take full ownership of Genworth MI Canada by acquiring the remaining 43% for nearly CAD1.6 billion ($1.2bn).
The Bermuda-based private equity firm is offering to buy the remaining shares in Genworth MI Canada at CAD43.5 ($33) per share.
Earlier this month, Genworth MI Canada changed its brand name to Sagen MI Canada.
The company operates through its subsidiary – Genworth Financial Mortgage Insurance, which is a private sector residential mortgage insurer in Canada.
Its subsidiary offers mortgage default insurance to Canadian residential mortgage lenders.
Genworth MI Canada had CAD7.1bn ($5.38bn) total assets and CAD3.8bn ($2.88bn) shareholders’ equity, as of 30 September 2020.
Sagen MI Canada president and CEO Stuart Levings said: “The Transaction, together with our Company’s recent rebranding as Sagen MI Canada, represents an exciting new chapter for the Company.
“We look forward under Brookfield’s ownership to continuing to work with lenders, regulators and mortgage professionals to help people responsibly achieve and maintain the dream of home ownership.”
In 2019, Brookfield Business Partners acquired 57% stake in Genworth MI Canada for $1.8bn
In August 2019, Brookfield Business Partners signed a deal to acquire a controlling stake of 57% in the Canadian firm from Genworth Financial for CAD48.86 ($37.06) per share or CAD2.4bn ($1.82bn). The deal was closed in December 2019.
For the current transaction, Brookfield Business Partners plans to fund nearly $460m, while its institutional partners will fund the remaining amount of the consideration.
Brookfield Business Partners managing partner David Nowak said: “We are pleased to have reached this agreement which will provide existing shareholders of the Company with price certainty and a meaningful premium in an uncertain market environment.”
The transaction will be carried out by means of and subject to a court-approved plan of arrangement under the Canada Business Corporations Act.
Expected to close in the first half of next year, the transaction would also need approval from the Canadian Minister of Finance, and the meeting of other customary closing conditions.