Brookfield, Birch Hill Near $2.9B Deal for Canadian Mortgage Firm

Brookfield Asset Management, in partnership with Birch Hill Equity Partners, is set to acquire a controlling 62% stake in First National Financial Corp., one of Canada's largest non-bank mortgage originators, in a $2.9 billion deal that values the company at a 13-15% premium over recent trading averages. The acquisition will take First National private, with founders Stephen Smith and Moray Tawse retaining minority indirect stakes of about 19% each. This move is part of Brookfield's broader strategy to expand its presence in the non-bank mortgage lending sector, complementing its prior acquisitions of Canadian mortgage insurer Sagen MI Canada and U.S. mortgage lender Angel Oak Companies. First National manages over $153 billion in mortgages, focusing primarily on prime residential and commercial properties, and the deal aims to create a vertically integrated mortgage platform, enhancing operational synergies and margin potential by combining underwriting, insurance, and origination. The transaction, expected to close in the fourth quarter of 2025, follows a competitive bidding process and has been deemed financially fair by independent advisors. Brookfield's dual acquisitions in Canada and the U.S. reflect a strategic response to structural shifts in mortgage markets, where traditional banks are retreating due to regulatory and capital challenges, opening opportunities for non-bank lenders and private credit investors.