Smith Financial Corp to acquire Home Capital in C$1.7bn deal

Home Capital is a Toronto-based provider of residential and non-residential mortgage lending, securitization of residential mortgage products and consumer lending and credit card services.

  • Smith Financial Corp is the family holding company of Canadian financial services executive Stephen Smith
  • Smith is also co-founder and chairman of Peloton Capital Management
  • Home Capital’s board has unanimously approved the agreement, which is expected to close in mid-2023

Smith Financial Corp has agreed to acquire the shares it does not already own of Toronto-based Home Capital, a provider of residential and non-residential mortgage lending, securitization of residential mortgage products and consumer lending and credit card services.

The deal values Home Capital’s equity at about C$1.7 billion.

Smith Financial Corp is the family holding company of Canadian financial services executive Stephen Smith. Smith is also co-founder and chairman of Peloton Capital Management, a Canadian private equity firm.

On the deal, Alan Hibben, chair of the Home Capital’s board of directors, said in a statement: “The Board, together with our financial and legal advisors, conducted a thorough review of the proposal from SFC and concluded that the Transaction is in the best interests of the Company and fair, from a financial point of view, 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.”

Home Capital’s board of directors has unanimously approved the agreement, which is expected to close in mid-2023.

BMO Capital Markets and TD Securities are acting as Home Capital’s financial advisors and Deloitte, as independent financial advisor, has provided a fairness opinion to Home Capital’s board of directors. Home Capital’s legal advisors are Torys LLP.

RBC Capital Markets is acting as financial advisor to Smith Financial Corp while their legal advisors are Stikeman Elliott.