Desmarais-Backed Canadian Mortgage Firm Nesto Acquires Lender CMLS

Canadian online mortgage company Nesto Inc., backed by Montreal's Desmarais family, has acquired real estate financier CMLS Group, boosting its mortgages under administration to over C$60 billion.

Nesto Inc., a prominent Canadian online mortgage company, has recently made a significant move in the real estate industry by acquiring CMLS Group, a well-known real estate financier. This strategic acquisition has propelled Nesto Inc. to a new level, with over C$60 billion ($43.8 billion) in mortgages under administration. The details of the financial terms of the deal have not been disclosed, but it is clear that this merger will create a powerhouse entity with more than 1,000 employees spread across 10 offices.

The transaction was made possible with the support of various investors, including Diagram Ventures, Portage, IGM Financial, National Bank of Canada, and others. Notably, all three investors affiliated with the Desmarais family, highlighting their confidence in the potential of this partnership. The acquisition of CMLS Group will open up new avenues of business for Nesto Inc., particularly in the realm of commercial lending.

This move comes at a time when Canada's banking watchdog has issued warnings about potential payment shocks for homeowners who took out mortgages during the pandemic, as interest rates are set to rise upon renewal. Nesto Inc. sees this as an opportunity to attract new clients, as homeowners seek out competitive rates in the market. The demand for housing continues to outstrip supply, leading to a favorable outlook for residential properties in terms of value appreciation. This demand is further fueled by the inability of housing developers to keep pace with the influx of newcomers to Canada.

Nesto Inc.'s acquisition of CMLS Group marks a significant milestone in the company's growth trajectory, positioning it as a key player in the Canadian real estate and mortgage industry. With a strong financial backing and a strategic vision for the future, Nesto Inc. is well-positioned to capitalize on the evolving market dynamics and meet the needs of homeowners and investors alike.