Mubadala Capital to Take CI Financial Private via Premium, All-Cash Offer

TORONTO--(BUSINESS WIRE)--Nov 25, 2024--

CI Financial Corp. (“CI”) (TSX: CIX) today announced that it has entered into a definitive agreement with an affiliate of Mubadala Capital, the alternative asset management arm of Mubadala Investment Company, to take CI private in a transaction that values CI’s equity at approximately $4.7 billion and implies an enterprise value of approximately $12.1 billion. Following the closing of the transaction, CI will continue to operate with its current structure and management team and will be independent of Mubadala Capital’s other portfolio businesses.

All issued and outstanding shares of CI will be acquired for cash consideration equal to $32.00 per share, other than shares held by members of senior management who enter into equity rollover agreements as further detailed below. The cash purchase price represents a 33% premium to the last closing price prior to the announcement of the transaction and a premium of 58% to the 60-day volume-weighted average trading price on the Toronto Stock Exchange.

CI’s Board of Directors, with interested directors abstaining, is unanimously recommending that CI shareholders vote in favor of the transaction. The recommendation follows the unanimous recommendation of a special committee of the Board, comprised solely of independent directors, that was formed in connection with the transaction (the “Special Committee”).

“This transaction, with its significant cash premium, represents an exceptional outcome for CI shareholders and provides certainty to shareholders while CI pursues its ongoing transformation,” said William E. Butt, CI’s Lead Director and Chair of the Special Committee. “It also provides significant benefits to Canada, by providing long-term capital to underpin the building of a Canadian champion in the wealth and asset management industries.”

“Mubadala Capital invests with a long-term outlook and represents long-term capital – providing stability and certainty for CIʼs clients and employees,” said Kurt MacAlpine, CI’s Chief Executive Officer. “With this transaction, CI has never been better positioned to fulfil our mission of delivering outstanding services and solutions to our clients.”

“We are fully aligned with the strategy and direction of the firm and look forward to working with the CI management team to continue to build this outstanding business and ensure that CI continues to deliver superior services to its clients,” said Hani Barhoush, Managing Director and CEO of Mubadala Capital.

“We look forward to partnering with CI’s talented team to capitalize on new opportunities in the asset and wealth management sectors and build on the company’s successes,” said Oscar Fahlgren, Chief Investment Officer of Mubadala Capital.

The transaction also supports CI’s expansion in the U.S., where it operates as Corient and will continue to operate independently under the Corient brand.

“We’re excited to continue to execute our U.S. strategy with our incredibly talented team,” said Mr. MacAlpine. “Notably, the transaction preserves Corient’s structure and its unique Private Partnership model, under which 250 of our colleagues are equity Partners in Corient. Our partnership model is highly differentiated in our industry – it allows us to deliver the best of the firm to all clients and creates a culture of collaboration and unified purpose.”

Benefits to Canada

• This transaction will maintain CI’s existing leadership and will result in CI retaining its talented team across CI’s multiple offices in Canada, and will create the opportunity for new hiring in Canada to support growth.
• CI will remain headquartered in Canada and existing operations and structure in Canada will stay in place. This includes maintaining CI’s existing technology and data protection practices, including maintaining all personal data in Canada for Canadian operations.
• Mubadala Capital’s long-term approach will create a stable, well-funded platform for CI to continue to grow, allowing management greater ability to reinvest into the overall business and strategy.
• Mubadala Capital is committed to continuing CI’s philanthropic support of charitable organizations across Canada.

Transaction Details

The transaction will proceed via a plan of arrangement under the Business Corporations Act (Ontario) and will require approval of at least (i) 66⅔ per cent of the votes cast by shareholders, and (ii) a simple majority of the votes cast excluding votes as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), at a special meeting of CI shareholders to be held to consider the transaction. The meeting is expected to be held in January 2025.

The transaction is also subject to court approval, regulatory clearances and other customary closing conditions. The transaction is not subject to any financing condition and, assuming the timely receipt of all required regulatory approvals, is expected to close in the second quarter of 2025.

The definitive agreement includes customary terms and conditions, including a non-solicitation covenant on the part of CI, which is subject to “fiduciary out” provisions that enable CI to terminate the agreement in customary circumstances, subject to Mubadala Capital having a right to match any third party superior proposal. A termination fee of $150 million is payable by CI to Mubadala Capital in certain circumstances, including termination of the agreement by CI pursuant to the “fiduciary out” provisions. A reverse termination fee of $225 million is payable by Mubadala Capital to CI if the transaction is not completed in certain circumstances, including where certain of the required regulatory approvals are not received.

Chief Executive Officer Kurt MacAlpine expects to roll all his equity in the transaction and other members of CI’s senior management holding an aggregate of up to 1.5% of CI’s shares are also expected to have the opportunity to enter into equity rollover agreements to exchange their CI shares into a new holding vehicle. In addition, Chairman William Holland may roll 25% of his total CI holdings in the transaction. All rollovers will occur at a value equal to the cash purchase price.

Each of CI’s directors and executive officers or entities controlled by them, which own or control an aggregate of approximately 16.88% of CI’s outstanding shares, have entered into a voting and support agreement with Mubadala Capital agreeing to vote their shares in favor of the transaction. All voting and support agreements terminate automatically upon termination of the definitive agreement or a change of recommendation by CI’s Board of Directors made in accordance with the terms of the definitive agreement. Any equity rollover agreements will terminate automatically upon termination of the definitive agreement.

CI’s debentures and notes are expected to remain outstanding following closing of the transaction and the financing for the transaction has been structured to maintain CI’s long-term issuer and senior unsecured debt ratings of Baa3 (Stable) by Moody’s. CI’s shares will be delisted from the Toronto Stock Exchange following closing of the transaction; however, CI is expected to remain a reporting issuer under applicable Canadian securities laws as a result of its debentures and notes remaining outstanding. Holders of outstanding shares of preferred equity in CI’s subsidiary, Corient Holdings Inc., have agreed to waive and amend certain liquidity and other rights in connection with the transaction through the closing of the transaction. Mubadala Capital intends to fund up to $750 million of additional cash at closing to reduce the preferred equity outstanding. Following the closing, the parties will continue prioritizing the maintenance of CI’s investment grade senior unsecured debt ratings.

CI will pay its previously declared regular quarterly dividends on January 15, 2025 and April 15, 2025 to shareholders of record as of December 31, 2024 and March 31, 2025, respectively, but under the terms of the definitive agreement, has agreed to suspend any additional dividends.

Board and Special Committee Recommendation

In arriving at its unanimous recommendation in favor of the transaction, the Special Committee considered several factors, including the opinion of INFOR Financial Inc. (“INFOR Financial”) to the effect that, as of the date thereof and subject to the assumptions, limitations and qualifications therein, the consideration to be received by CI shareholders (other than shareholders eligible to enter into an equity rollover agreement) pursuant to the transaction is fair, from a financial point of view, to such shareholders.

CI’s Board of Directors also received INFOR Financial’s fairness opinion and, after receiving the unanimous recommendation of the Special Committee, unanimously determined (with interested directors abstaining) that the transaction is in the best interests of CI and unanimously recommends that shareholders vote in favor of the transaction.

A copy of the written fairness opinion, as well as additional details regarding the terms and conditions of the definitive agreement and transaction and the rationale for the recommendations made by the Special Committee and the Board of Directors, will be included in the management proxy circular and other materials to be mailed to shareholders in connection with the shareholder meeting to approve the transaction. The summaries of the definitive agreement and voting and support agreements in this press release are qualified in their entirety by the provisions of those agreements. Copies of the definitive agreement and voting and support agreements and, when finalized, the meeting materials will be filed under CI’s profile on SEDAR+ at www.sedarplus.ca.

Advisors

INFOR Financial is acting as exclusive financial advisor to the Special Committee. INFOR Financial was paid a fixed fee for its services and is not entitled to any fee that is contingent on the successful completion of the transaction. Wildeboer Dellelce LLP is serving as legal advisor to the Special Committee.

Stikeman Elliott LLP and Skadden, Arps, Slate, Meagher & Flom LLP are serving as legal advisors to CI. RBC Capital Markets is also an advisor to CI.

Jefferies Securities Inc. is acting as lead financial advisor to Mubadala Capital and Blake, Cassels & Graydon LLP and Latham & Watkins LLP are serving as legal advisors to Mubadala Capital. FGS Longview is acting as strategic communications and public affairs advisor to Mubadala Capital. BMO Capital Markets is also an advisor to Mubadala Capital.

About CI Financial

CI Financial Corp. is a diversified global asset and wealth management company operating primarily in Canada, the United States and Australia. Founded in 1965, CI has developed world-class portfolio management talent, extensive capabilities in all aspects of wealth planning, and a comprehensive product suite. CI manages, advises on and administers approximately $518.1 billion in client assets (as at September 30, 2024). CI operates in three segments:

• Asset Management, which includes CI Global Asset Management, which operates in Canada, and GSFM, which operates in Australia.
• Canadian Wealth Management, operating as CI Wealth, which includes CI Assante Wealth Management, Aligned Capital Partners, CI Assante Private Client, CI Private Wealth, Northwood Family Office, CI Coriel Capital, CI Direct Investing, CI Direct Trading and CI Investment Services.
• U.S. Wealth Management, which includes Corient Private Wealth, an integrated wealth management firm providing comprehensive solutions to ultra-high-net-worth and high-net-worth clients across the United States.

CI is headquartered in Toronto and listed on the TSX (TSX: CIX). To learn more, visit CI’s website or LinkedIn page.

CI Global Asset Management is a registered business name of CI Investments Inc., a wholly owned subsidiary of CI Financial Corp.

About Mubadala Capital

Mubadala Capital is a global alternative asset manager that oversees $24 billion USD of assets under management. The firm is an independent subsidiary of Mubadala Investment Company, a c. $302 billion USD global sovereign investor headquartered in Abu Dhabi, UAE. Mubadala Capital manages assets through its four investment businesses spanning various private market strategies, including private equity, special situations, solutions, and venture capital. Mubadala Capital has a team of over 200 spanning 5 offices, including in Abu Dhabi, New York, London, San Francisco, and Rio De Janeiro. Mubadala Capital aims to be the partner of choice for investors looking for attractive and differentiated risk-adjusted returns across various private markets and alternative asset classes.

Note Regarding Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws. Forward-looking information may relate to our future outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”, “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. These statements include, without limitation, statements regarding the receipt, in a timely manner, of shareholder, court and regulatory approvals in respect of the transaction, the timing for the special meeting of CI shareholders to consider the transaction, expected participation in equity rollover arrangements, expectations regarding remaining a reporting issuer under applicable Canadian securities laws, the expected closing date for the transaction and CI’s business prospects, debt ratings and securities outstanding following closing of the transaction.

Undue reliance should not be placed on forward-looking information. The forward-looking information in this press release is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Further, forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to, those described in this press release. The belief that the investment fund industry and wealth management industry will remain stable and that interest rates will remain relatively stable are material factors made in preparing the forward-looking information and management’s expectations contained in this press release and that may cause actual results to differ materially from the forward-looking information disclosed in this press release. In addition, factors that could cause actual results to differ materially from expectations include, among other things, the possibility that the transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required regulatory, shareholder and court approvals and other conditions to the closing of the transaction or for other reasons, the risk that competing offers or acquisition proposals will be made, the negative impact that the failure to complete the transaction for any reason could have on the price of the shares or on the business of the Corporation, general economic and market conditions, including interest and foreign exchange rates, global financial markets, the impact of pandemics or epidemics, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in CI’s disclosure materials filed with applicable securities regulatory authorities from time to time. Additional information about the risks and uncertainties of the Corporation’s business and material risk factors or assumptions on which information contained in forward‐looking information is based is provided in the Corporation’s disclosure materials, including the Corporation’s most recently filed annual information form and any subsequently-filed interim management’s discussion and analysis, which are available under our profile on SEDAR+ at www.sedarplus.ca.

There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents our expectations as of the date of this news release and is subject to change after such date. CI Financial disclaims any intention or obligation or undertaking to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.

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CONTACT: CI Financial

Investor Relations

Jason Weyeneth, CFA

Vice-President, Investor Relations & Strategy

416-681-8779

jweyeneth@ci.comMedia Relations

Canada

Murray Oxby

Vice-President, Corporate Communications

416-681-3254

moxby@ci.comUnited States

Jimmy Moock

Managing Partner, StreetCred

610-304-4570

jimmy@streetcredpr.com

ci@streetcredpr.comMubadala Capital

Boyd Erman

Partner, FGS Longview

416-523-5885

boyd.erman@fgslongview.com

KEYWORD: NORTH AMERICA CANADA

INDUSTRY KEYWORD: BANKING ASSET MANAGEMENT PROFESSIONAL SERVICES FINANCE

SOURCE: CI Financial Corp.

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