ECN Capital (Triad) and Skyline Champion to Form New Captive Finance Company
Source: Monitordaily – ECN Capital and Skyline Champion Corporation entered into a share subscription agreement pursuant to which Skyline Champion agreed to make an approximately C$185 million ($138 million) equity investment in ECN Capital on a private placement basis in exchange for 33.55 million common shares of ECN Capital and 27.45 million mandatory convertible preferred shares, Series E, of ECN Capital. Upon closing of the private placement, Skyline Champion is expected to beneficially own an approximately 19.9% interest in ECN Capital (assuming the conversion of all convertible preferred shares).
In connection with the private placement , ECN Capital and Skyline Champion will form a captive finance company that will be 51% owned by Skyline Champion and 49% owned by Triad Financial Services, a wholly-owned subsidiary of ECN Capital. The captive finance company will provide a retail finance loan program for customers and a new branded floor plan offering for Skyline Champion and its affiliates in the manufactured home finance space. The company will operate with services provided by Triad.
“We are pleased to announce this new and expanded partnership with Skyline Champion, a leading participant in the North America manufactured housing sector,”Steven Hudson. CEO of ECN Capital said, “This transaction represents the culmination of the strategic review process that we commenced earlier this year, and we are very excited by the significant growth opportunities that the establishment of the new captive finance category will bring to Triad. The concurrent equity and preferred share investments in ECN Capital also represents a strong endorsement of ECN Capital’s business model and the value of our platform.”
“We are excited to announce this new strategic collaboration with one of our longstanding business partners,” Mark Yost, president and CEO of Skyline Champion, said. “The partnership with Triad will help streamline the homebuying experience for our channel partners as well as the consumers of our homes. This will allow us to expand our ability to offer affordable housing solutions more efficiently while driving company-wide growth. The asset-light model of these financing solutions, combined with the strength of our balance sheet, allow us to partner with ECN Capital while continuing our investments in our longer-term commercial and operational initiatives. We are excited about the future and the benefits this investment will bring to both companies’ stakeholders.”