TORONTO - Canada's leading provider of reverse mortgages, Homeq Corp. (TSX:HEQ), says it's supporting a friendly takeover offer that values the company at $138 million.
Homeq offers the CHIP-branded reverse mortgages, primarily marketed to Canadians over 55 who can use the value of their home's equity to borrow money without making repayments while they own the property.
The company announced after markets closed Friday that Birch Hill Equity Partners will offer $9.50 cash for each share of Homeq. That's 21 per cent above the stock's closing price Friday at the Toronto Stock Exchange.
Birch Hill, based in downtown Toronto, is a private company that invests in mid-sized businesses valued between $30 million and $600 million.
"Over the last three years we have achieved extremely encouraging volumes of mortgage originations and growth in our portfolio," Homeq president and CEO Steven Ranson said in a statement.
"Our new ownership structure will provide us with a reliable source of capital, enabling us to serve the financial needs of the burgeoning ranks of seniors, Canada's fastest growing demographic."
As of Dec. 31, Homeq's subsidiary HomEquity Bank had about 9,000 reverse mortgage contracts with a value of $1.2 billion, securied by residential properties across Canada valued at about $3.3 billion.
HomEquity Bank has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.
No comments:
Post a Comment