PE Deals

CI Financial to sell minority stake in US wealth business to consortium

Based in Toronto, CI Financial Corp is a global asset and wealth management company.

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  • Abu Dhabi Investment Authority, Bain Capital, Flexpoint Ford, Ares Management and the State of Wisconsin are among the buyers
  • The $1 billion (C$1.34 billion) investment gives CI US an enterprise value of $5.3 billion (C$7.1 billion)
  • CI US will be led by a newly-formed six-person board of directors

CI Financial Corp has agreed to sell a pre-initial public offering (IPO) minority investment in its US wealth management business (CI US) to a consortium of investors. The buyers include Abu Dhabi Investment Authority, Bain Capital, Flexpoint Ford, Ares Management and the State of Wisconsin.

Upon closing, the consortium will hold a 20 percent stake in CI US in the form of convertible preferred equity.

The $1 billion (C$1.34 billion) investment gives the business an enterprise value of $5.3 billion (C$7.1 billion). This represents 25.6x Q1 annualized adjusted EBITDA of CI US.

The deal equity value is 3x CI Financial’s current equity market capitalization as of 10 May 2023.

“We capitalized on an opportunity to accomplish in the private markets the objectives we sought in the IPO – value creation for our shareholders, an infusion of capital to materially deleverage, and the opportunity to build relationships with leading long-term investors,” said Kurt MacAlpine, CEO of CI Financial, in a statement .

“The C$1.34 billion investment in CI US accomplishes all of these objectives, allowing us to continue to execute on our vision for our US wealth management business while preserving flexibility to proceed with an IPO in the future,” MacAlpine added.

The transaction is expected to be completed in May 2023.

CI US will be overseen by a newly-formed six-person board of directors, comprising five members nominated by CI Financial and one member nominated by the group of investors.

CI Financial is a global asset and wealth management company operating primarily in Canada, the US and Australia. Based in Toronto, it managed about C$391.1 billion in assets as of 31 March.

RBC Capital Markets served as financial advisor, Skadden, Arps, Slate, Meagher & Flom served as US legal advisor, and Stikeman Elliott served as Canadian legal advisor to CI Financial in this transaction.