nesto Acquires CMLS Group, Katipults to Forefront of Canadian Mortgage Lending

M&A | Jun 24, 2024

Image: Nesto acquires CMLS group (release)

Backed by Major Investors, nesto Acquires CMLS Group Backed by Major Investors

As digital underwriting starts to take hold in Canada, digital mortgage lender, NESTO acquires CMLS Group, the third largest mortgage finance company in Canada, backed by major investors Diagram Ventures, Portage Ventures, National Bank of Canada’s corporate venture arm, IGM Financial, BMO Capital Partners, Fonds de solidarité FTQ, and Fondaction.  The combined company will manage over $60 billion in mortgages across the country and aims to combine the assets of both organizations to create a more efficient and customer-focused mortgage ecosystem.

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• This acquisition sees nesto diversifying into commercial mortgage financing, a new area of expansion for the firm.  It's nesto's digital innovation together with CMLS Group's robust infrastructure that investors are combining to improve the mortgage process efficiency and accuracy for customers.  The combination broadens the overall customer base and national footprint, leading to increased market share and competitiveness.
• Malik Yacoubi, CEO of Nesto, will oversee the united firm, while Sam Brown, CEO of CMLS Group, will remain president of the commercial division. Both brands will maintain their identities, preserving continuity and utilizing their established market reputations.
• While the terms of the acquisition were not disclosed in the release, the deal is supposed by major investments from prominent financial institutions, demonstrating confidence in its potential.
• The timing of this transaction aligns with the broader industry trends toward digital transformation and growing demand for more streamlined and customer-centric mortgage solutions.  See:  FundMore partners with EQBank to optimize mortage lending

Overview of CMLS Group

CMLS Group is one of Canada's largest independently held mortgage finance companies, known for its diverse portfolio of mortgage products and strong industry presence. CMLS Group, founded in 1974 in Vancouver, has over 40 years of experience in the mortgage market. It began with a concentration on commercial real estate financing before expanding to residential mortgages in 2012.

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The company offers a diverse range of mortgage products, including residential mortgages, commercial lending, loan servicing, and institutional services. CMLS Group, Canada's third-largest mortgage finance company, manages mortgages worth more than $60 billion. This huge portfolio demonstrates the company's substantial involvement in the Canadian mortgage market.

The company's leadership has recently changed, with Sam Brown joining as president and CEO in early 2024. Chris Brossard assumed the role of executive chair of the board, assuring continuity in strategic direction and leadership. CMLS Group has created strategic alliances to expand its service offerings and market reach. The company's engagement with Canada Life for mortgage servicing demonstrates its commitment to offering comprehensive mortgage solutions.

Outlook

Nesto's strategic purchase puts it at the forefront of the future of Canadian mortgage lending. The combination of digital innovation and comprehensive mortgage solutions will benefit Canadian consumers by providing more competitive rates, improved services, and a streamlined mortgage process.

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