(Bloomberg) — Equitable Group Inc., a Canadian online banking firm, agreed to take over digital rival Concentra Bank for C$470 million ($371 million) to bulk up its assets and expand its business with credit unions.
Equitable is buying Credit Union Central of Saskatchewan’s 84% stake in Concentra, and also struck agreements with investors representing most of the remaining 16% of shares, according to a statement Monday.
The deal expands Equitable’s personal banking portfolio by C$7.4 billion in loans and gives it a business that provides wholesale banking and trust services to 90% of Canadian credit unions outside of Quebec. Equitable was founded in 1970 as a trust company and now has 325,000 Canadian customers through its Equitable Bank subsidiary, which operates entirely online.
The deal is “one of the most important and consequential” transactions in the company’s history and “accelerates our growth plan by several years,” Equitable Chief Executive Officer Andrew Moor said in the statement.
Equitable, based in Toronto, is financing the purchase through a fully committed credit facility and C$200 million of new equity raised through a bought deal. The transaction is expected to close in the second half of the year, subject to regulatory approvals.
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