CI Financial sells $1 bln minority stake in US wealth management arm

CI Financial

11/05/2023 16:57

TORONTO, May 11 (Reuters) - CI Financial Corp  CIX.TO 
will sell a 20% stake in its U.S. wealth management arm to Bain
Capital LP and other investors for C$1.34 billion ($1.0
billion), the Canadian asset manager said on Thursday, pausing
efforts to take the business public.
    CI shares jumped 44% on the news, before trading up 29.3% at
C$16.09 at midday.
    Investors also include a unit of the Abu Dhabi Investment
Authority, Flexpoint Ford, Ares Management funds and the U.S.
state of Wisconsin, the company said in a statement.
    Proceeds from the sale of CI US will be used to reduce net
leverage to 2.7 from 4.
    In December, the company started the initial public offering
process for CI US, attracting strong interest from large
institutional investors, it said.
    "We capitalized on an opportunity to accomplish in the
private markets the objectives we sought in the IPO," CI Chief
Executive Kurt MacAlpine said, citing value creation for
shareholders, capital infusion, and building relationships with
leading long-term investors.
    The sale is expected to close in late May. A six-person
board of directors will oversee CI U.S., with five members
nominated by CI and one member nominated by the investor group.
    CI on Thursday also reported first-quarter adjusted earnings
of 74 cents​​ per share, compared with the mean expectation of
eight analysts of 78 cents. Revenue rose 0.6% to C$637.82
million from a year ago, above analysts' estimate of C$626.36
million.
($1 = 1.3372 Canadian dollars)

 (Reporting by Maiya Keidan; Editing by Richard Chang)
 ((Maiya.Keidan@thomsonreuters.com; 1 226 688 4571; Reuters
Messaging: maiya.keidan.thomsonreuters.com@reuters.net))