BMO Financial Group has announced a definitive agreement with Stonepeak to sell its Transportation Finance and Vendor Finance businesses, including related loan portfolios in the United States and Canada. The combined loan and lease portfolio totals approximately C$14.5 billion as of March 31, 2026. Financial terms include cash consideration and an earnout contingent upon the businesses achieving specified future performance targets. The transaction is expected to close in the fourth quarter of fiscal 2026, subject to regulatory approvals and customary closing conditions.
BMO’s Transportation Finance business provides specialized financing for trucks and trailers predominantly through dealer-managed relationships, while its Vendor Finance business offers equipment financing through original equipment manufacturers and their dealer networks. Under the terms of the deal, BMO will use a portion of the sale proceeds to invest in an approximate 19.9% equity interest in the new entity, enabling continued participation in the businesses’ long-term value creation while improving capital efficiency. On a pro forma basis, the transaction is expected to improve BMO’s common equity Tier 1 ratio by approximately 28 basis points and be accretive to the bank’s return on equity. BMO expects to record a net after-tax charge of approximately C$0.9 billion primarily related to goodwill in the third quarter of 2026, treated as an adjusting item.
Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $88 billion in assets under management, with target sectors including transportation and logistics, digital infrastructure, energy and energy transition, and real estate. BMO Capital Markets and BofA Securities acted as BMO’s financial advisors, with Sullivan & Cromwell and Osler, Hoskin & Harcourt serving as legal counsel. Skadden, Arps, Slate, Meagher & Flom and Blake, Cassels & Graydon acted as legal counsel to Stonepeak.
KEY QUOTES:
“This transaction is consistent with BMO’s focus on delivering sustained profitable growth, and enables us to invest in areas that deliver the full power of BMO to our clients. We’re allocating capital to areas with strong potential for long-term value creation while obtaining an equity interest in future income of the transportation and vendor finance businesses through a more capital efficient structure.”
Aron Levine, President, BMO U.S.
“Building on decades of sector expertise, BMO Transportation and Vendor Finance has established itself as one of North America’s premier transportation financing platforms. We are excited to work closely with BMO and the outstanding leadership team in place to invest further in the business, build on its strong performance, and grow its commercial customer base while preserving the culture, reputation, and relationships that have made the business so successful to date.”
Will Schleier, Senior Managing Director, Stonepeak
