Regal Bidco, a newly established entity controlled by Birch Hill Equity Partners and Brookfield Asset Management, has reached a definitive agreement to acquire First National Financial Corporation.

Under the terms of the agreement, Regal will acquire all outstanding common shares of First National for a cash price of C$48 per share.

The deal values the company’s equity at C$2.9bn ($2.1bn).

The cash offer represents a premium of approximately 15.2% and 22.8% over the 30 and 90-day volume weighted average trading prices of the shares on the Toronto Stock Exchange prior to the announcement.

First National Financial Corporation is the parent company of First National Financial a Canadian originator, underwriter, and servicer of primarily prime residential and commercial mortgages.

It manages over C$155bn ($113.1bn) on in mortgages, making it one of Canada’s largest non-bank mortgage originators and underwriters.

Founders Stephen Smith and Moray Tawse will retain minority stakes, selling approximately two-thirds of their holdings while exchanging the remaining shares for interests in Regal.

Upon completion of the transaction, Smith and Tawse are expected to hold an indirect interest of approximately 19% in First National, while Birch Hill and Brookfield will collectively own about 62%.

Jason Ellis is expected to continue as CEO of First National, with the current leadership team remaining in place after the transaction’s completion.

First National CEO Jason Ellis said: “This transaction represents the start of an exciting new chapter for First National.

“Birch Hill and Brookfield bring significant expertise in the Canadian financial services industry, and we are excited to partner with them to grow our platform, drive innovation, and deliver for our customers, employees and institutional partners.”

The acquisition is anticipated to close in the fourth quarter of 2025, pending necessary shareholder, court, and regulatory approvals.