ECN Capital Corp. announced it has entered into a definitive agreement to make a strategic investment in The Kessler Group (KG). Under the terms of the agreement, ECN Capital will invest $221.2 million in KG. This investment represents a significant strategic opportunity for ECN to partner with Howard Kessler, his team and KG’s clients.
Kessler pioneered co-branded credit cards by launching the first affinity card with MBNA and helped build MBNA from its infancy to its sale to Bank of America for $35 billion. KG has since expanded beyond its credit card roots and offers a range of services to financial services institutions focused on the consumer finance industry in the U.S., Canada and Australia. These services include:
- Strategic Advisory: managing, advising and structuring credit card and other consumer portfolios for credit card issuers, banks, credit unions and payment networks;
- Portfolio Advisory: portfolio transaction services;
- Risk-Based Marketing: marketing expertise and funding for consumer financial products; and
- Multi-Channel Marketing: strategy development, multi-channel marketing analytics and planning services.
“I am extremely proud of KG’s accomplishments and our role as a trusted advisor to premier financial institutions,” Kessler said. “I have spent considerable time and effort to find the right partner to assist in KG’s growth. I believe ECN is that partner.”
“Howard Kessler and his team have built a truly unique business,” said Steven Hudson, CEO of ECN Capital. “With this partnership, ECN completes its strategic repositioning from an asset-based lender to a scalable business service company that provides lending and credit services to U.S. financial institutions.”
“Howard is a visionary entrepreneur who has built an exceptional business,” said Jim Nikopoulos, ECN Capital’s President. “The Kessler Group has shaped the payments landscape for more than three decades and adds a tremendous business services platform to ECN,” Nikopoulos added.
On a pro forma basis, the investment will be immediately accretive to adjusted earnings per share (EPS) and return on equity (ROE).
The transaction, which is expected to close in the second quarter of 2018, is subject to customary closing conditions.