Private Equity Group Acquires Canadian Reverse Mortgage Provider
HOMEQ Corporation (TSX:HEQ) announced Friday the closing of an arrangement involving Monaco Acquisition Inc., an entity controlled by Birch Hill Equity Partners. Under the arrangement, Birch Hill will acquire HOMEQ for cash at a price of $9.50 per common share.
In the deal initially announced March 30, Birch Hill will indirectly acquire all of HOMEQ’s outstanding shares totaling $138 million.
HOMEQ’s subsidiary HomEquity Bank originates Canada’s largest portfolio of reverse mortgages under the Canadian Home Income Plan (CHIP). As of September 30, 2012, HOMEQ’s portfolio comprised 9,500 reverse mortgages valued at $1.3 billion.
In July 2011, HOMEQ lowered the minimum age for its reverse borrowers from 60 to 55, making them the only Canadian provider of reverse mortgages to homeowners aged 55 and older.
Birch Hill has invested in more than 50 companies since 1994, and with $2 billion in capital management, it is the leader in long-term value creation in Canada’s mid market.
It is expected that HOMEQ’s shares will be delisted from the Toronto Stock Exchange.
Written by Jason Oliva