Canada’s Home Capital Group will be taken private by Smith Financial Corporation in a deal that values the company at $1.7 billion.

The cash offer of $44 per share from a subsidiary of Smith Financial, the family holding company of Canadian financier Stephen Smith, represents a 63 per cent premium to Home Capital’s closing price on Friday. Smith Financial already owns 9.1 per cent of Home Capital. 

Alan Hibben, board chair at Home Capital, said in a statement that the transaction is in the company’s best interests and is financially fair 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,” Hibben added.

In the same release, Smith called Home Capital a strategic asset, “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.” Smith added, “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 agreement includes a “go-shop” period, which allows Home Capital to seek other bids until Dec. 30. 

The transaction is expected to close in mid-2023. Home Capital says it intends to continue paying its regular quarterly cash dividends until then. 

REM Editorial Team