Canadian digital mortgage lender nesto has announced its acquisition of CMLS Group, a mortgage finance company, for an undisclosed sum.
Through the acquisition of the Canada-based CMLS Group, nesto aims to create the largest technology-enabled lender in the country.
According to nesto, the enlarged entity will also build Canada’s mortgage ecosystem of the future.
It will have over C$60bn ($43.84bn) in mortgages under administration. The enlarged firm is also expected to become a leader in residential and commercial mortgages.
Besides, it will have more than 1,000 employees across 10 offices.
All executives and employees of CMLS Group will shift to the combined entity, with the firm’s shareholders receiving an equity stake in the new organisation.
The transaction has been backed by investments from Diagram Ventures, Portage, IGM Financial, National Bank of Canada’s corporate venture capital arm NAventures, Fonds de solidarité FTQ, BMO Capital Partners and Fondaction.
Nesto CEO Malik Yacoubi said: “In addition to the strong business rationale for the transaction, we were very impressed by the strong entrepreneurial values at CMLS and how engaged employees are.
“There is a clear culture fit for our organisations. We are excited to build the Mortgage Ecosystem of the Future with CMLS’.”
Established in 1974 as a commercial lender, CMLS Group served as lender, adviser, asset manager as well as software and services provider across nearly all commercial and single-family residential real estate markets in Canada.
CMLS Group delivers its products and services through CMLS Financial, Intellifi, and CMLS Asset Management.
CMLS Group CEO Sam Brown said: “Joining forces with nesto will accelerate our next chapter of growth and further help our people, partners and clients succeed.
“I’m delighted to build on our proud history and reputation with a partner who shares our commitment to culture and delivering value to partners and clients.”
Yacoubi will serve as the CEO of the combined entity while Brown will continue as president and head of its commercial division.
