ECN Capital Corp. announced that it has entered into a definitive agreement with Canadian Western Bank to sell all of the Company’s Canadian Commercial and Vendor (“C&V”) Finance assets for cash proceeds of approximately C$900 million, representing a C$2 million premium to book value (exclusive of goodwill, break and other costs totaling approximately C$10 million after tax).
The transaction is subject to customary approvals and is expected to close in the first quarter of 2018. This transaction will free up approximately C$180 million in equity capital for redeployment in furthering of ECN Capital’s ongoing strategic plan.
In conjunction with the previously announced sale of the Company’s U.S. Commercial and Vendor Finance business, the current transaction to sell all the Canadian Commercial and Vendor Finance assets results in total cumulative proceeds of approximately C$2.96 billion for a combined premium of approximately C$215 million on net assets.
“This transaction will enable these assets to continue producing strong results under the ownership of a leading Canadian bank. For ECN, this marks another successful step in validating book value and the execution of our strategic plan,” said Jim Nikopoulos, ECN Capital’s President. “The successful dispositions have supported our strategy to transition from a balance sheet lender to asset light specialty finance businesses as evidenced by the recent Service Finance and Triad Financial transactions,” added Mr. Nikopoulos.
“The successful execution to sell all of the Canadian C&V assets brings an end to harvesting assets and has positioned us well to continue to execute on our strategic plan,” said Steve Hudson, ECN Capital’s CEO.
BMO Capital Markets and Macquarie Capital acted as financial advisors on the transaction for ECN Capital. Blake Cassels & Graydon LLP advised the Company on the transaction.
With total owned and managed assets of more than $4.9 billion as of June 30, 2017, ECN Capital Corp. (TSX: ECN) is one of North America's leading finance companies. ECN Capital operates in four verticals: Home Improvement Finance, Commercial & Vendor Finance, Rail Finance and Aviation Finance.