A major Canadian portfolio MIC will soon have CMHC origination access, announcing its takeover of Xceed Mortgage yesterday.
The Plan of Arrangement between Xceed and MCAN will see MCAN acquiring all of Xceed’s issued and outstanding shares at a 24 per cent premium above the annual average of $1.75 a share. The deal – subject to approval from Xceed shareholders and regulatory review – is expected to conclude within 90 days.
“We are pleased to announce this strategic acquisition that will add scale to our operating platform and expand our origination capability for single family residential mortgages,” says MCAN’s President and CEO William Jandrisits. “We expect the addition of Xceed’s CMHC origination and underwriting capabilities combined with MCAN’s existing operations and superior access to capital will contribute to long-term, sustainable earnings.”
Xceed Mortgage Corporation, based in Toronto, is a provider of residential mortgages that it originates in Canada, with approximately $800 million of mortgages under administration.
“We believe this transaction represents the best outcome resulting from the strategic review process that the special committee undertook to enhance shareholder value,” says Xceed’s Jim Taylor, chairman of the special committee of the board.
MCAN is a mortgage investment corporation that deals in portfolio mortgages, including single family residential, residential construction, non-residential construction and commercial loans.
Ivan Wahl, Xceed’s chairman of the board, says “this transaction provides Xceed shareholders with an opportunity for liquidity and to acquire shares of a strong performer in the mortgage industry and capital markets.”
The acquisition of Xceed will allow MCAN to work more closely with MCAP
Commercial LP to further leverage MCAN’s single family residential operations, says Jandrisits.
MCAP is currently the sub-servicer of Xceed’s mortgages.