BMO Completes Transportation and Vendor Finance Sale to Stonepeak

BMO Financial Group announced on October 29, 2026 that it has closed the sale of its Transportation Finance and Vendor Finance businesses to Stonepeak, a transaction first announced on May 11, 2026. At closing, BMO transferred approximately 75% (C$11 billion) of the estimated C$14.5 billion total combined loan and lease portfolio to Stonepeak. The remaining balances are expected to transfer in the first quarter of fiscal 2027, subject to customary conditions.

BMO and Stonepeak also entered into a transitional services agreement under which BMO will provide certain services to support an orderly transition for clients. A transaction presentation BMO posted when the agreement was signed stated that the bank would provide transitional services for up to 24 months after closing.

BMO now holds a 19.9% interest in the Stonepeak-managed entity that acquired the businesses, which the bank said enables it to continue participating in their long-term value creation. The presentation described the stake as a 19.9% non-voting ownership interest in the new company, with associated governance rights. The businesses will operate under the name Longview Capital Solutions.

BMO said it expects the transaction to improve its common equity Tier 1 (CET1) ratio by approximately 23 basis points in the fourth quarter of fiscal 2026.

Agreement Terms and Expected Capital Impact

BMO signed the definitive agreement with Stonepeak on May 11, 2026, covering the businesses and their related loan portfolios in the United States and Canada. Under the terms, Stonepeak will acquire the assets for cash consideration and an earnout contingent on the business achieving specified future performance targets, and BMO said it would use a portion of the consideration to invest in an approximate 19.9% equity interest in the new entity. The combined loan and lease portfolio totaled approximately C$14.5 billion as of March 31, 2026; the presentation split that figure into US$9.2 billion in U.S. Banking and C$1.6 billion in Canadian personal and commercial banking, applying an exchange rate of 1.39345.

For accounting purposes, the businesses were to be classified as held for sale, and BMO said it expected to record a net after-tax charge of approximately C$0.9 billion (C$1.05 billion pre-tax), primarily related to goodwill, in the third quarter of fiscal 2026. The charge was to be reported in the Corporate Services segment and treated as an adjusting item, with the amount subject to closing adjustments and foreign exchange rates prevailing at the date of closing.

At the May signing, BMO estimated that, on a pro forma basis, the transaction would improve its CET1 ratio by approximately 28 basis points on closing, primarily from a reduction in risk-weighted assets that the presentation quantified at approximately C$10 billion. BMO also said the sale would be accretive to return on equity; the presentation stated the transaction was expected to contribute about 30 basis points toward the bank’s return on equity targets and was not expected to have a significant impact on future run-rate earnings. At the time, BMO expected the transaction to close in the fourth quarter of fiscal 2026, subject to regulatory approvals and customary closing conditions.

“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,” said Aron Levine, President, BMO U.S., in the May announcement.

The Businesses and the Buyer

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. Stonepeak described the combined business as based in Irving, Texas, with more than 700 employees and operations across the United States and Canada, and characterized it as one of the largest lenders to the commercial truck and trailer segment in North America. Upon closing, the business was to continue to be led by Gary Kempinski, Head of Transportation Finance & Vendor Finance at BMO.

“Building on decades of sector expertise, BMO Transportation and Vendor Finance has established itself as one of North America’s premier transportation financing platforms,” said Will Schleier, Senior Managing Director at Stonepeak.

The transaction includes asset-based financing from PGIM, the global asset management business of Prudential Financial (PRU ), and bank financing with Bank of America (BAC ) as Lead Financing Arranger. BMO Capital Markets and BofA Securities acted as financial advisors to BMO, and Sullivan & Cromwell LLP and Osler, Hoskin & Harcourt LLP acted as legal counsel to BMO. Skadden, Arps, Slate, Meagher & Flom LLP and Blake, Cassels & Graydon LLP acted as legal counsel to Stonepeak.

Stonepeak is an alternative investment firm specializing in infrastructure and real assets, headquartered in New York, with approximately US$88 billion of assets under management; its target sectors include transportation and logistics, digital infrastructure, energy and energy transition, and real estate. Stonepeak said it has invested in nine transportation-focused asset leasing platforms representing nearly $28 billion in enterprise value at the time of acquisition, including Textainer, which it described as owning the world’s largest and most diversified container fleet on a CEU basis; Air Transport Services Group, which it described as the largest cargo aircraft lessor in North America; and TRAC Intermodal, which it described as the largest marine chassis provider in the United States. Stonepeak’s announcement identified BMO as the eighth largest bank in North America by assets.