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In a significant move, an arm of Abu Dhabi’s state investment fund is set to acquire Canadian asset manager CI Financial, in a bold step towards expanding their investments in North America. Mubadala Capital, the asset management subsidiary of the esteemed $302 billion state-backed investment fund, has agreed to pay C$32 a share for CI Financial, offering a 33% premium to its market closing price. This deal values CI Financial at an impressive equity value of C$4.7 billion ($3.36 billion) and an enterprise value of C$12.1 billion including debt.
Here’s why this acquisition is creating a buzz:
- Strategic Expansion: This acquisition marks Mubadala Capital’s largest deal yet, showcasing the organization’s intent to explore new avenues of growth in North America. CEO Hani Barhoush highlighted their interest in complex management buyouts and building stakes in private equity-owned businesses as part of this expansion strategy.
- Innovative Financing: Mubadala is leveraging a large equity investment from its parent company to finance this acquisition, demonstrating its commitment to establishing a strong foothold in the region.
- Operational Security: Commitment to maintaining data integrity by keeping CI Financial’s data in Canada reveals Mubadala’s respect for regulatory requirements and preserving the brand’s operational setup.
- Strengthening Alliances: By investing alongside CI Financial’s existing management, Mubadala ensures a smooth transition and continued partnership with key stakeholders.
- Forward-Thinking Approach: Despite market challenges, Mubadala plans to retain CI Financial’s operations intact under private ownership, reflecting a strategic vision for sustained growth.
Mubadala’s recent investments, including the acquisition of Bugaboo and Babel, demonstrate a strategic expansion into diverse sectors. This acquisition solidifies Mubadala Capital’s vision and commitment to collaborative growth, positioning them as key players in the dynamic landscape of North American investments. The future looks promising as Mubadala continues its journey towards strategic investments and bold endeavors.
