Brookfield Business Partners has announced its acquisition of Genworth Canada, with an approximately 57% controlling interest in the business.
The acquisition will be for an aggregate of 48,944,645 common shares, for a total of $1.8 billion. Brookfield stated that it will be funding approximately US$700 million of the purchase on closing, accompanied by co-investments from its institutional partners.
The transaction is expected to be closed by the second half of this year.
Among the main drivers of the acquisition was Genworth’s established presence in the Canadian market, along with its significant share in the private residential mortgage sector and its diverse, resilient risk profile.
“We are very pleased to make this investment in Genworth Canada, a high-quality leader in the mortgage insurance sector,” Brookfield managing partner David Nowak stated in the announcement.
“Genworth is an industry-leading business that generates strong, consistent earnings and operates in a sector with high barriers to entry. We look forward to partnering with management to support its ongoing success, drawing on our expertise in insurance and residential real estate.”
“Genworth Canada operates in a highly regulated industry with strict capital adequacy requirements, creating natural barriers to entry. The business has established excellent and long-standing relationships with high quality lenders including leading Canadian banks, mortgage finance companies, and other regional lenders and credit unions,” the announcement added.