ECN Capital enters into definitive agreement to be acquired by an investor group led by Warburg Pincus

Executive Summary

• ECN Capital Corp. entered into a definitive arrangement agreement to be acquired by an investor group led by Warburg Pincus in an all‑cash transaction valued at ~C$1.9 billion (enterprise value).
• Shareholders will receive C$3.10 per common share and C$26.00 per Series C preferred share (plus accrued dividends); Series E shares will be purchased at C$3.10 per share. The price represents a 12‑13% premium to the unaffected closing price on Nov 12, 2025.
• The transaction is expected to close in H1 2026 pending shareholder, court and regulatory approvals; common and Series C shares will be delisted from the TSX thereafter.

Key Details

• Consideration:
• C$3.10 cash per common share (≈13% premium to C$2.75 closing price).
• C$26.00 cash per Series C preferred share + accrued dividends (≈11% premium).

• C$3.10 cash per Series E preferred share + accrued dividends.

• Enterprise Value: Approximately C$1.9 billion.

• Shareholder Returns: Transaction provides >200 % total shareholder return since the 2016 spin‑off from Element Financial.

• Board & Special Committee: Unanimously approved; received a verbal fairness opinion from CIBC confirming financial fairness to shareholders.

• Support Agreements:

• Champion Homes (≈19.7 % of voting shares) and ECN directors/officers collectively control ~18.8 % of common shares and have entered support/voting agreements.

• Combined, these parties represent ~26 % of total voting power in favour of the deal.

• Deal Protections:

• Termination fee payable by ECN: C$35.4 million if a superior proposal is accepted.

• Reverse termination fee payable to Purchaser: C$53.1 million if the transaction fails to close under specified conditions.

• Financing Structure:

• Equity investors in the Purchaser Group have delivered equity commitment letters sufficient to fund the cash consideration and related fees; no financing condition precedent.

• Purchaser may obtain additional debt financing, but completion is not contingent on it.

• Debenture Matters:

• ECN may be required (pre‑closing) to solicit consent or offer to purchase its 6.00 % (2026), 6.25 % (2027) and 6.50 % convertible (2030) senior unsecured debentures.

• If no consent/offers are completed, the debentences will remain listed on the TSX post‑closing; ECN must make a cash offer to repurchase them at 100 % principal + accrued interest within 30 days after closing.

• Dividends: Company expects to continue paying regular quarterly dividends on common and Series C shares and semi‑annual dividends on Series E shares prior to the transaction’s completion.

• Closing Timeline & Conditions:

• Shareholder meeting scheduled for January 2026.

• Closing subject to: (i) ≥66⅔ % of votes from Common + Series E shareholders; (ii) if required, a simple majority of Common votes; (iii) similar thresholds for Series C shareholders; plus court approval and regulatory clearances.

• Post‑Closing:

• Common and, if approved, Series C shares will be delisted from the TSX.
• ECN will remain a reporting issuer under Canadian securities law due to outstanding debentures.

Notable Quotes

“We are very pleased to enter into this Transaction with the Purchaser Group… to support ECN Capital's continued growth as a private company,” – Steven Hudson, CEO, ECN Capital
“The Transaction provides compelling certainty of value and liquidity at an attractive premium.” – Steven Hudson, CEO, ECN Capital