Brookfield Business Partners L.P. (NYSE: BBU)
(TSX:BBU.UN) (“Brookfield Business Partners”), together with
certain of its affiliates and institutional partners (collectively,
“Brookfield”), today announced it has entered into an arrangement
agreement (the “Arrangement Agreement”) to acquire all of the
outstanding common shares of Genworth MI Canada Inc., now operating
as Sagen MI CanadaTM (the “Company”) (TSX: MIC) not already owned
by Brookfield (the “Transaction”).
The Company is the largest private sector
residential mortgage insurer in Canada, providing mortgage
default insurance to Canadian residential mortgage lenders, in turn
making homeownership more accessible to first-time homebuyers.
Under the terms of the Arrangement Agreement,
Brookfield, which currently owns an approximate 57% controlling
interest in the Company, will purchase all of the remaining
outstanding common shares of the Company at a price of C$43.50 per
share. The purchase price represents a premium of approximately 22%
to the Company’s closing share price on the Toronto Stock Exchange
on October 23, 2020, the last trading day prior to today’s
announcement, and a premium of approximately 25% to the 20-day
volume weighted average price on that date.
"We are pleased to have reached this agreement
which will provide existing shareholders of the Company with price
certainty and a meaningful premium in an uncertain market
environment,” said David Nowak, Managing Partner, Brookfield
Business Partners.
Stuart Levings, President and CEO, stated, “The
Transaction, together with our Company’s recent rebranding as Sagen
MI CanadaTM, represents an exciting new chapter for the Company. We
look forward under Brookfield’s ownership to continuing to work
with lenders, regulators and mortgage professionals to help people
responsibly achieve and maintain the dream of home ownership.”
The Company’s board of directors, other than
certain conflicted directors (the “Board”), unanimously approved
the Arrangement Agreement following a unanimous recommendation of a
special committee of independent directors of the Board.
Closing
The Transaction will be implemented by way of
and subject to a court-approved plan of arrangement under the
Canada Business Corporations Act. Closing of the Transaction is
subject to shareholder approval at a special meeting of the Company
(the “Special Meeting”) expected to be held in late December 2020.
The Transaction is also subject to court approval, approval by the
federal Minister of Finance, and the satisfaction of other
customary closing conditions. The Transaction is expected to close
in the first half of 2021.
Following closing, Brookfield and the Company
intend to continue to satisfy the public float requirement of the
Insurance Companies Act (Canada) through the issuance of a new
class of publicly-traded voting preferred shares of the Company,
which preferred shares are intended to be issued prior to or
concurrently with closing of the Transaction. A special resolution
of shareholders to create this new class of voting preferred shares
of the Company will be presented to Company shareholders for
approval at the Special Meeting.
Funding
Upon closing of the Transaction, the aggregate
consideration payable by Brookfield to holders of common shares of
the Company will be approximately US$1.2 billion. Brookfield
Business Partners intends to fund approximately US$460
million and for institutional partners to fund the balance of
the purchase price.
-ends-
Brookfield Business Partners is
a business services and industrials company focused on owning and
operating high-quality businesses that benefit from barriers to
entry and/or low production costs. Brookfield Business Partners is
listed on the New York and Toronto stock exchanges. Important
information may be disseminated exclusively via the website;
investors should consult the site to access this information.
Brookfield Business Partners is the flagship
listed business services and industrials company of Brookfield
Asset Management Inc. (NYSE: BAM) (TSX: BAM.A), a leading global
alternative asset manager with approximately US$550 billion of
assets under management. For more information, please visit our
website at https://bbu.brookfield.com.
Genworth MI Canada Inc. (TSX:
MIC) changed its brand from Genworth MI CanadaTM to Sagen MI
CanadaTM effective October 13th, 2020. The Company, operating
through its subsidiary, Genworth Financial Mortgage Insurance
Company Canada, is the largest private sector residential mortgage
insurer in Canada. The Company provides mortgage default insurance
to Canadian residential mortgage lenders, making homeownership more
accessible to first-time homebuyers. The Company differentiates
itself through customer service excellence, innovative processing
technology, and a robust risk management framework. For more than
two decades, the Company has supported the housing market by
providing thought leadership and a focus on the safety and
soundness of the mortgage finance system. As at September 30th,
2020, the Company had C$7.1 billion total assets and C$3.8 billion
shareholders' equity. Find out more at www.sagen.ca.
Media Claire HollandBrookfield
Business PartnersTel: +1 416 369 8236Email:
claire.holland@brookfield.com |
Investor RelationsAlan FlemingBrookfield Business
Partners Tel: +1 416 645 2736Email:
alan.fleming@brookfield.com |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS AND INFORMATION
Note: This news release contains
"forward-looking information" within the meaning of Canadian
provincial securities laws and "forward-looking statements" within
the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended, Section 21E of the U.S. Securities Exchange Act of 1934,
as amended, "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations. The words “will,” “deliver,”
“intend,” “achieve,” “maintain,” “subject” and “expect,”
derivatives thereof and other expressions which are predictions of
or indicate future events, trends or prospects and which do not
relate to historical matters will tend to identify forward-looking
statements. Forward-looking statements in this news release include
statements regarding the timing of various steps to be completed in
connection with the Transaction (including the holding of the
Special Meeting, the special resolution of Company shareholders to
create a new class of voting preferred shares of the Company and
potential issuances of such voting preferred shares), the
anticipated timing for the closing of the Transaction and the
receipt of approvals required to effect the Transaction.
Factors that could cause actual results to
differ materially from those contemplated or implied by
forward-looking statements include, but are not limited to: the
impact or unanticipated impact of general economic, political and
market factors in the countries in which we do business; including
as a result of the recent novel coronavirus outbreak (“COVID-19”);
the behavior of financial markets, including fluctuations in
interest and foreign exchange rates; global equity and capital
markets and the availability of equity and debt financing and
refinancing within these markets; strategic actions including
dispositions; the ability to complete and effectively integrate
acquisitions into existing operations and the ability to attain
expected benefits; changes in accounting policies and methods used
to report financial condition (including uncertainties associated
with critical accounting assumptions and estimates); the ability to
appropriately manage human capital; the effect of applying future
accounting changes; business competition; operational and
reputational risks; technological change; changes in government
regulation and legislation within the countries in which we
operate; governmental investigations; litigation; changes in tax
laws; ability to collect amounts owed; catastrophic events, such as
earthquakes; hurricanes and pandemics/ epidemics; the possible
impact of international conflicts and other developments including
terrorist acts and cyber terrorism; and other risks and factors
detailed from time to time in our documents filed with the
securities regulators in Canada and the United States.
In addition, our future results may be impacted
by the economic shutdown resulting from the COVID-19 pandemic and
the related global reduction in commerce and travel and substantial
volatility in stock markets worldwide, which may negatively impact
our revenues, affect our ability to identify and complete future
transactions, impact our liquidity position and result in a
decrease of cash flows and impairment losses and/or revaluations on
our investments and assets, and therefore we may be unable to
achieve our expected returns. See “Risks Associated with the
COVID-19 Pandemic” in the “Risks and Uncertainties” section
included in our Management’s Discussion and Analysis of Financial
Condition and Results of Operations for the second quarter ended
June 30, 2020 for further information.
We caution that the foregoing list of important
factors that may affect future results is not exhaustive. When
relying on our forward-looking statements, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. Except as required by law,
Brookfield Business Partners undertakes no obligation to publicly
update or revise any forward-looking statements or information,
whether written or oral, that may be as a result of new
information, future events or otherwise.
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