TORONTO, May 11 (Reuters) – CI Financial Corp (CIX.TO) will sell a 20% stake in its US wealth management division to Bain Capital LP and other investors for C$1.34 billion ($1.0 billion). sell, the Canadian asset manager announced on Thursday pausing efforts to publicize the deal.
CI shares rose 44% on the news before trading up 29.3% at C$16.09 at midday.
The investors also include a unit of the Abu Dhabi Investment Authority, Flexpoint Ford, Ares Management Funds and the State of Wisconsin, the company said in a statement.
Proceeds from the sale of CI US will be used to reduce net leverage from 4 to 2.7.
In December, the company launched the IPO for CI US, attracting strong interest from large institutional investors, it said.
“We took the opportunity to achieve the goals we set out to achieve with the IPO in the private markets,” said CI CEO Kurt MacAlpine, citing shareholder value creation, capital injection and building relationships with leading long-term investors .
The sale is expected to be completed by the end of May. A six-member board of directors will oversee CI US, with five nominated by CI and one nominated by the investor group.
CI also reported first-quarter adjusted earnings Thursday of 74 cents a share, compared to the average eight analyst expectation of 78 cents. Revenue rose 0.6% year over year to CA$637.82 million, beating analysts’ estimate of CA$626.36 million. ($1 = 1.3372 Canadian dollars)
Reporting by Maiya Keidan; Edited by Richard Chang
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