REG - Bank of Montreal - BMO Announces Strategic Sale of Finance Businesses

Bank of MontrealAnnouncement

12/05/2026 07:00

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RNS Number : 8771D  Bank of Montreal  11 May 2026

NEWS

FOR IMMEDIATE RELEASE

BMO Announces Strategic Sale of Transportation and Vendor Finance Businesses

·    Supports BMO's strategy to elevate returns and accelerate growth;
transaction accretive to capital ratios and ROE

·    Positions these premier businesses for continued growth in an
efficient capital structure

·    BMO to invest in a 19.9% equity interest, enabling continued
participation in the businesses' long-term value creation

TORONTO and CHICAGO, May 11, 2026 - BMO Financial Group (TSX: BMO) (NYSE: BMO)
today announced the signing of a definitive agreement with Stonepeak for the
sale of BMO's Transportation Finance and Vendor Finance businesses, including
related loan portfolios in the United States and Canada.

The transaction will advance BMO's strategic priorities by improving capital
efficiency and sharpening its focus on core markets where the bank has deep
client relationships and attractive long-term growth opportunities.

"This transaction is consistent with BMO's focus on delivering sustained
profitable growth, and enables us to invest in areas that deliver the full
power of BMO to our clients," said Aron Levine, President, BMO U.S. "We're
allocating capital to areas with strong potential for long-term value creation
while obtaining an equity interest in future income of the transportation and
vendor finance businesses through a more capital efficient structure.
Following the transition, Stonepeak will continue to provide best-in-class
client experiences, supported by its strong global infrastructure platform and
deep expertise in transportation-focused asset leasing."

BMO's Transportation Finance business provides specialized financing for
trucks and trailers predominantly through dealer-managed relationships, and
its Vendor Finance business offers equipment financing through original
equipment manufacturers and their dealer networks. The combined loan and lease
portfolio in the United States and Canada totals approximately C$14.5 billion
as of March 31, 2026.

 

Headquartered in New York, Stonepeak is a leading alternative investment firm
specializing in infrastructure and real assets with approximately US$88
billion of assets under management. Stonepeak's target sectors include
transportation and logistics, digital infrastructure, energy and energy
transition, and real estate.

"Building on decades of sector expertise, BMO Transportation and Vendor
Finance has established itself as one of North America's premier
transportation financing platforms," said Will Schleier, Senior Managing
Director at Stonepeak. "We are excited to work closely with BMO and the
outstanding leadership team in place to invest further in the business, build
on its strong performance, and grow its commercial customer base while
preserving the culture, reputation, and relationships that have made the
business so successful to date."

Transaction Highlights

Under the terms of the agreement, Stonepeak will acquire the assets of BMO's
Transportation Finance and Vendor Finance businesses for cash consideration
and an earnout contingent upon the business achieving specified future
performance targets. BMO will use a portion of the consideration to invest an
approximate 19.9% equity interest in the new entity.

For accounting purposes, the businesses will be classified as held for sale,
and BMO expects to record a net after-tax charge of approximately C$0.9
billion primarily related to goodwill in the third quarter of 2026, which will
be reported in the Corporate Services segment and treated as an adjusting
item. This amount is subject to closing adjustments and foreign exchange rates
prevailing at the date of closing.

Transaction aligns with BMO's strategy to elevate returns

On a pro forma basis, the transaction is expected to improve the bank's common
equity Tier 1 (CET1) ratio by approximately 28 bps primarily from the
reduction in risk weighted assets and be accretive to the bank's return on
equity. The transaction is not expected to have a significant impact on the
bank's future run rate earnings.

The transaction is expected to close in the fourth quarter of fiscal 2026,
subject to regulatory approvals and customary closing conditions. BMO and
Stonepeak will work together to ensure a smooth transition.

For additional information about this transaction please refer to the BMO
Investor Relations website at
www.bmo.com/main/about-bmo/investor-relations/acquisitions
(http://www.bmo.com/main/about-bmo/investor-relations/acquisitions)

In connection with the transaction, BMO Capital Markets and BofA Securities
acted as BMO's financial advisors. Sullivan & Cromwell LLP and Osler,
Hoskin & Harcourt LLP acted as legal counsel to BMO. Skadden, Arps, Slate,
Meagher & Flom LLP and Blake, Cassels & Graydon LLP acted as legal
counsel to Stonepeak.

-30-

 

About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets,
with total assets of $1.5 trillion as of January 31, 2026. Serving clients for
200 years and counting, BMO is a diverse team of highly engaged employees
providing a broad range of personal and commercial banking, wealth management,
global markets and investment banking products and services to approximately
13 million clients across Canada, the United States, and in select markets
globally. Driven by a single purpose, to Boldly Grow the Good in business and
life, BMO is committed to driving positive change in the world, and making
progress for a thriving economy, sustainable future, and stronger communities.

About Stonepeak

Stonepeak is a leading alternative investment firm specializing in
infrastructure and real assets with approximately $88 billion of assets under
management. Through its investment in defensive, hard-asset businesses
globally, Stonepeak aims to create value for its investors and portfolio
companies, with a focus on downside protection and strong risk-adjusted
returns. Stonepeak, as sponsor of private equity and credit investment
vehicles, provides capital, operational support, and committed partnership to
grow investments in its target sectors, which include digital infrastructure,
energy and energy transition, transport and logistics, and real estate.
Stonepeak is headquartered in New York with offices in Houston, Washington,
D.C., London, Hong Kong, Seoul, Singapore, Sydney, Tokyo, Abu Dhabi, and
Riyadh. For more information, please visit www.stonepeak.com.

Caution Regarding Forward Looking Statements

Certain statements in this press release are forward-looking statements.  All
such statements are made pursuant to the "safe harbor" provisions of, and are
intended to be forward-looking statements under, the United States Private
Securities Litigation Reform Act of 1995 and any applicable Canadian
securities legislation. These forward-looking statements include, but are not
limited to, statements with respect to the expected closing of the proposed
transaction, the potential payment of an earn-out, the financial, operational
and capital impact of the proposed transaction, the future performance of the
transportation and vendor finance businesses, our strategies or future
actions, our targets and commitments, expectations for our financial condition
and capital position, and include statements made by our management.
Forward-looking statements are typically identified by words such as "expect",
"anticipate", "will", "may" or negative or grammatical variations thereof.

By their nature, forward-looking statements are based on various assumptions
and are subject to inherent risks and uncertainties. We caution readers of
this press release not to place undue reliance on our forward-looking
statements as the assumptions underlying such statements may not turn out to
be correct and a number of factors could cause actual future results,
conditions, actions or events to differ materially from the targets,
expectations, estimates or intentions expressed in the forward-looking
statements. Such factors include, but are not limited to: the possibility that
the proposed transaction does not close when expected or at all because
required regulatory approvals and other conditions to closing are not received
or satisfied on a timely basis or at all or are received subject to adverse
conditions or requirements; the anticipated benefits from the proposed
transaction, such as it being accretive to BMO's return on equity, improving
BMO's common equity Tier 1 capital ratio (CET 1 ratio) and receiving a payment
in respect of the earnout, are not realized in the time frame anticipated or
at all as a result of the performance of the transportation and vendor finance
businesses, changes in general economic and market conditions, interest and
exchange rates, monetary policy, laws and regulations (including changes to
capital requirements) and their enforcement; reputational risks and the
reaction of BMO's customers and employees to the transaction; diversion of
management time on transaction-related issues; and those other factors
discussed in the Risks That May Affect Future Results section, and the
sections related to credit and counterparty, market, liquidity and funding,
operational non-financial, legal and regulatory compliance, strategic,
environmental and social, and reputation risk, in the Enterprise-Wide Risk
Management section of BMO's 2025 Annual Report, and the Risk Management
section in BMO's First Quarter 2026 Report to Shareholders, all of which
outline certain key factors and risks that may affect our future results and
our ability to anticipate and effectively manage risks arising from all of the
foregoing factors.. We caution that the foregoing list is not exhaustive of
all possible factors. These factors should be considered in addition to other
uncertainties and potential events, and the inherent uncertainty of
forward-looking statements.

Assumptions about BMO expected financial performance (including balance sheet,
income statement and regulatory capital figures), expected closing date of the
proposed transaction, restructuring costs, and assumed accounting treatment
were considered in estimating the impact of the transaction on BMO's return on
equity and CET1 ratio.

BMO does not undertake to update any forward-looking statement, whether
written or oral, that may be made, from time to time, by the organization or
on its behalf, except as required by law.

Media Contact:

Jeff Roman jeff.roman@bmo.com (mailto:jeff.roman@bmo.com) (416) 867‑3996

Investor Relations Contact:

Christine Viau Christine.viau@bmo.com (mailto:Christine.viau@bmo.com) (416)
867-6956

Bill Anderson bill2.anderson@bmo.com (mailto:bill2.anderson@bmo.com) (416)
867-7834

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