Stonepeak has agreed to acquire BMO Financial Group’s Transportation Finance and Vendor Finance businesses, adding a large North American commercial equipment lender to the infrastructure investor’s transportation and logistics franchise while giving BMO a route to improve capital efficiency without fully exiting the business.

The companies announced the agreement in a transaction centered on asset-based lending, equipment finance and transportation-sector credit. The businesses being sold include related loan portfolios in the United States and Canada and serve customers financing trucks, trailers and specialized equipment across transportation, agriculture, construction and other commercial end markets.

BMO said the combined loan and lease portfolio totaled approximately C$14.5 billion as of March 31, 2026. The bank did not disclose a headline purchase price, but said Stonepeak will acquire the assets for cash consideration and a performance-based earnout tied to specified future targets. BMO will use a portion of the consideration to reinvest in an approximate 19.9% equity interest in the new entity.

The retained stake is central to the transaction structure. It allows BMO to reduce balance-sheet intensity while preserving economic exposure to a long-established transportation and vendor finance platform. The bank said the transaction supports its strategy to elevate returns, improve capital efficiency and concentrate investment in core markets where it sees stronger long-term growth opportunities.

On a pro forma basis, BMO expects the sale to improve its common equity Tier 1 capital ratio by approximately 28 basis points, primarily through a reduction in risk-weighted assets. The bank also expects the transaction to be accretive to return on equity and said it should not have a significant impact on future run-rate earnings.

For accounting purposes, BMO said the businesses will be classified as held for sale. It expects to record a net after-tax charge of approximately C$0.9 billion in the third quarter of 2026, primarily related to goodwill. The charge will be reported in the Corporate Services segment and treated as an adjusting item. BMO said the final amount remains subject to closing adjustments and foreign exchange rates prevailing at closing.

The deal is expected to close in the fourth quarter of fiscal 2026, subject to regulatory approvals and customary closing conditions. The cross-border nature of the business, with operations in the United States and Canada, means the transaction will remain subject to review before Stonepeak can assume control.

Stonepeak’s acquisition gives the New York-based alternative investment manager a platform that sits close to its core investment themes: hard assets, contracted or relationship-based financing channels, logistics infrastructure and equipment essential to commercial supply chains. The businesses are based in Irving, Texas, and employ more than 700 people across the United States and Canada.

BMO Transportation Finance provides specialized financing for trucks and trailers, predominantly through dealer-managed relationships. BMO Vendor Finance provides equipment financing through original equipment manufacturers and dealer networks. Together, the businesses form a commercial lending and leasing platform serving transportation, logistics and other equipment-dependent sectors.

Stonepeak said the transaction follows its long-held thesis around transportation-focused asset leasing. The firm said it has invested in nine such platforms representing nearly $28 billion in enterprise value at the time of acquisition. Its cited transportation and logistics investments include Textainer, Air Transport Services Group and TRAC Intermodal.

The acquisition also extends the role of private capital in areas historically held on bank balance sheets. Transportation finance and vendor finance are credit-heavy businesses that can generate recurring income, but they also consume capital and require specialized servicing, underwriting and collateral management. For banks facing higher regulatory capital expectations and pressure to lift returns, selling or partnering around such businesses can free capital while maintaining client or economic links.

For Stonepeak, the appeal lies in the physical collateral and the essential nature of the financed assets. Trucks, trailers and specialized equipment are integral to freight movement, agriculture, construction and industrial operations. The loans and leases tied to those assets can fit institutional investors’ demand for asset-backed cash flows, especially when paired with sector expertise and existing dealer or vendor relationships.

Will Schleier, senior managing director at Stonepeak, said BMO Transportation and Vendor Finance had established itself as one of North America’s premier transportation financing platforms. He said Stonepeak plans to work with BMO and the existing leadership team to invest further in the business, build on its performance and grow its commercial customer base while preserving its culture, reputation and relationships.

Leadership continuity is also part of the transaction design. Upon closing, the business is expected to continue to be led by Gary Kempinski, head of Transportation Finance and Vendor Finance at BMO. Kempinski said Stonepeak brings experience, operating expertise and relationships in North American transportation and logistics infrastructure, particularly in asset leasing businesses.

BMO framed the transaction as a strategic sale rather than a full retreat from the sector. Aron Levine, president of BMO U.S., said the agreement aligns with the bank’s focus on sustained profitable growth and enables it to invest in areas that deliver broader value to clients. He also pointed to the equity interest as a way for BMO to participate in future income from the transportation and vendor finance businesses through a more capital-efficient structure.

The structure reflects a broader pattern in banking and institutional finance: large banks are increasingly distinguishing between client franchises they want to keep, capital-intensive asset pools they may want to reduce, and businesses that can be repositioned through partnerships with private investment firms. In this case, BMO is retaining exposure to the upside while moving the majority ownership and balance-sheet commitment to Stonepeak.

The deal is also notable for its financing stack. Stonepeak said the transaction includes asset-based financing from PGIM, the global asset management business of Prudential Financial, and bank financing with Bank of America as lead financing arranger. The participation of PGIM underscores the institutional credit component of the transaction, while Bank of America’s role highlights continued bank involvement in arranging financing for large private-capital acquisitions.

Asset-based lending has gained attention as private credit firms, insurers and alternative asset managers seek exposure to pools of loans secured by receivables, equipment, vehicles, aircraft, real estate or other identifiable collateral. Transportation and equipment finance can be attractive to such investors because collateral values, payment histories and end-market demand can be assessed with specialized underwriting frameworks. At the same time, these businesses are sensitive to freight cycles, used-equipment values, borrower credit quality and interest-rate conditions.

For BMO, the transaction comes with clear capital and accounting implications. The expected C$0.9 billion after-tax charge reflects the cost of repositioning the platform, but the bank’s stated benefits include a 28-basis-point CET1 ratio improvement and return-on-equity accretion. Those metrics matter because investors and regulators closely watch capital levels, balance-sheet efficiency and profitability at large North American banks.

BMO has a sizable cross-border banking platform, with operations across Canada and the United States. The bank described itself as the eighth-largest bank in North America by assets, with total assets of C$1.5 trillion as of Jan. 31, 2026, and approximately 13 million clients. A transaction involving a C$14.5 billion loan and lease portfolio is therefore meaningful, but not transformative at the group level.

Stonepeak, meanwhile, has approximately $88 billion of assets under management and focuses on infrastructure and real assets. Its target sectors include transportation and logistics, digital infrastructure, energy and energy transition, and real estate. The BMO platform gives Stonepeak an operating business that combines lending, leasing, dealer relationships and sector-specific collateral management rather than a single infrastructure asset.

The vendor finance component broadens the platform beyond trucking. Vendor finance typically involves equipment financing offered in partnership with manufacturers or dealer networks, making it a channel-based business that depends on origination partnerships, customer service and efficient credit decisioning. The transportation finance component is more directly tied to fleets, dealers and commercial trucking customers.

The transaction may also be read as a signal for additional bank-private capital partnerships in specialty finance. Banks have long had advantages in funding, client relationships and regulated lending operations, while private capital firms have become increasingly active in acquiring or financing specialized asset pools. When banks want to reduce risk-weighted assets but retain client connectivity or income participation, minority reinvestment structures can create a middle ground.

The deal’s final impact will depend on regulatory approvals, closing adjustments, foreign exchange rates and the future performance of the businesses. BMO’s earnout also means part of the economics depends on the platform meeting specified targets after the sale. Until closing, the businesses will remain under BMO’s ownership and will be classified as held for sale for accounting purposes.

Advisers on the transaction include BMO Capital Markets and BofA Securities as financial advisers to BMO. Sullivan & Cromwell LLP and Osler, Hoskin & Harcourt LLP are serving as legal counsel to BMO. Skadden, Arps, Slate, Meagher & Flom LLP and Blake, Cassels & Graydon LLP are serving as legal counsel to Stonepeak.

For the finance sector, the transaction is a fresh example of balance-sheet optimization by a major bank and expansion by an infrastructure-focused alternative investment manager into asset-backed credit. It links bank capital strategy, private-credit funding and transportation equipment finance in a single deal, with BMO seeking higher returns on capital and Stonepeak adding scale in a sector where it has already built a significant investment record.