Canadian Tire reacquires Scotiabank’s 20% stake in its financial services arm in $650m deal

Financial Transaction: Canadian Tire buys back Scotiabank’s 20% stake in its financial services arm, CTFS, through an all-cash transaction valued at around $650 million (CAD 895 million).
Loan Supplement: $290 million (CAD 400 million) of the transaction value is supported by an 18-month term loan from Desjardins Capital Markets.
CTFS Operations: CTFS, primarily known as Canadian Tire Bank, based in Oakville, Ontario, operates the Triangle credit card portfolio and rewards program for the retail chain.
Credit Card Holder Increase: The number of credit card holders has grown from 1.8 million to 2.3 million since Scotiabank first acquired its 20% stake in May 2014.
Buy-Back Rationale: Greg Hicks, CEO of Canadian Tire, states that the buy-back will expedite key elements of the Triangle rewards strategy, enabling the company to stay relevant to customers’ changing needs and expand the credit card program.
Continued Relationship: Although the partnership concludes, Scotiabank will provide a committed credit facility of $800 million (CAD 1.1 billion) to the financial services arm for the next 18 months.
Financial Advisor: Goldman Sachs is enlisted as the financial advisor for Canadian Tire to assess “strategic alternatives” for the financial services arm in the next year.