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

Kitco Media
By Reuters
Published:
Updated:
Reuters
TORONTO, May 11 (Reuters) - CI Financial Corp 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)

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