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ECN Capital Corp. — M&A Activity 2026
Apr 25, 2026
47378_rns_2026-04-24_bd4f1c83-dfaf-40ad-8fe8-4da1d3a077ca.pdf
M&A Activity
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FORM 51-102F3
MATERIAL CHANGE REPORT
Section 7.1 of National Instrument 51-102
Continuous Disclosure Obligations
ITEM 1: Name and Address of Company
ECN Capital Corp. (the "Company")
777 South Flagler Drive Suite 800 East
West Palm Beach, Florida 33401
ITEM 2: Date of Material Change
April 24, 2026.
ITEM 3: News Release
A news release was disseminated over PR Newswire and filed on SEDAR+ at www.sedarplus.ca on April 24, 2026.
ITEM 4: Summary of Material Change
On April 24, 2026, the Company completed the previously announced plan of arrangement under the Business Corporations Act (Ontario) (the "OBCA") pursuant to which Sinatra CA Acquisition Corp. (the "Purchaser"), a newly formed acquisition vehicle controlled by an investor group led by investment funds managed by Warburg Pincus LLC, acquired: (i) all of the issued and outstanding common shares of the Company (the "Common Shares") for C$3.10 in cash per Common Share; (ii) all of the issued and outstanding cumulative 5-year minimum rate reset preferred shares, Series C of the Company (the "Series C Preferred Shares") for C$26.00 in cash per Series C Preferred Share (plus all accrued but unpaid dividends thereon); and (iii) all of the issued and outstanding mandatory convertible preferred shares, Series E of the Company (the "Series E Preferred Shares" and, together with the Common Shares and the Series C Preferred Shares, the "Shares") for C$3.10 in cash per Series E Preferred Share (plus all accrued but unpaid dividends thereon) (the "Arrangement").
ITEM 5: Full Description of Material Change
On April 24, 2026, the Company completed the Arrangement under Section 182 of the OBCA pursuant to which the Purchaser acquired all of the issued and outstanding Shares of the Company.
Pursuant to the Arrangement, holders of Common Shares received C$3.10 in cash per Common Share, holders of Series C Preferred Shares received C$26.00 in cash per Series C Preferred Share (plus all accrued but unpaid dividends thereon), and holders of Series E Preferred Shares received C$3.10 in cash per Series E Preferred Share (plus all accrued but unpaid dividends thereon).
As a result of the Arrangement, the Company became a wholly-owned subsidiary of the Purchaser.
Stock Exchange Delisting
The Common Shares and the Series C Preferred Shares are expected to be delisted from the Toronto Stock Exchange (the "TSX") on or around April 28, 2026 (the "TSX Delisting").
Treatment of Debentures
The Company will remain a reporting issuer under applicable Canadian securities laws following the TSX Delisting as the outstanding 6.00% Senior Unsecured Debentures of the Company due December 31, 2026 (the "2026 Debentures"), 6.25% Senior Unsecured Debentures of the Company due December 31, 2027 (the "2027 Debentures") and 6.50% Convertible Senior Unsecured Debentures of the Company due April 30, 2030 (the "2030 Convertible Debentures" and, together with the 2026 Debentures and 2027 Debentures, the "Company Debentures") will continue to be listed on the TSX.
Within 30 days of the date of completion of the Arrangement, as required in accordance with the Company Debentures' respective terms, the Company will make a cash offer to purchase all of the outstanding Company Debentures, in whole or in part (in a minimum amount of C$1,000 principal amount and multiples thereof), in cash, at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon up to, but excluding, the date of payment (the "Debenture Offers"). In addition, beginning 10 trading days before the date of completion of the Arrangement, until 30 days after the applicable Debenture Offer is delivered (the "Change of Control Conversion Period"), holders of the 2030 Convertible Debentures are entitled to convert their debentures and receive a cash payment in an amount equal to C$3.10 per Common Share that they would have been entitled to receive upon conversion, inclusive of an additional number of "make-whole premium" shares they would have been entitled to receive upon conversion following a change of control of the Company (plus unpaid interest up to but excluding the conversion date), as set out in the indenture governing the 2030 Convertible Debentures. As a result, during the Change of Control Conversion Period, each holder of C$1,000 principal amount of 2030 Convertible Debentures shall be entitled to receive a cash payment equal to C$1,022.12 (being C$822.28 plus the make-whole premium of C$199.84) (plus unpaid interest up to but excluding the conversion date) upon the conversion of such debentures.
Following the Change of Control Conversion Period, each holder of 2030 Convertible Debentures who has not exercised its right of conversion, upon the exercise of such right shall be entitled to receive and shall accept, in lieu of the number of Common Shares then sought to be acquired by it, a cash payment of C$3.10 per Common Share that such holder of a 2030 Convertible Debenture would have been entitled to receive at the effective time of the Arrangement (the "Effective Time") if, at the Effective Time, the holder had been the registered holder of the number of Common Shares sought to be acquired by it and to which it was entitled to acquire upon exercise of the conversion right applicable to the 2030 Convertible Debentures. As a result, following the Change of Control Conversion Period, each holder of C$1,000 principal amount of 2030 Convertible Debentures shall be entitled to receive C$822.28 (plus unpaid interest up to but excluding the conversion date) upon the conversion of such debentures.
Subject to the results of such offers, the Company may submit an application to cease to be a reporting issuer under applicable Canadian securities laws and to otherwise terminate the Company's public reporting requirements.
Reorganization of Business
As part of the completion of the Arrangement, the Company amalgamated with certain of its wholly-owned subsidiaries. The Company expects to complete a further amalgamation with the Purchaser in the coming days, following the TSX Delisting.
Following the amalgamation of the Company with the Purchaser, the resulting amalgamated corporation intends to continue out of the Province of Ontario under the Business Corporations Act (Ontario) and into the State of Delaware pursuant to the Delaware General Corporation Law such that, following such continuance, the Company will be organized under the laws of the State of Delaware. As part of such continuance, the Company will adopt new organizational documents in accordance with Delaware law and will retain the name "ECN Capital Corp."
Following its continuance into Delaware, the Company intends to distribute its RV and Marine Finance business segment, including, primarily, the businesses operated by Source One Financial Services, LLC, Intercoastal Financial Group, LLC and Paramount Capital Group, LLC (together the "Distributed Entities"), to certain affiliates such that the Distributed Entities will no longer be subsidiaries of the Company.
The Distributed Entities represented approximately 20% of the Company's consolidated revenue for the fiscal year ending December 31, 2025. Following such distribution, the Company will continue to operate its remaining businesses, primarily focused on the Manufactured Housing Finance business segment. Although the Distributed Entities will no longer be subsidiaries of the Company, they will remain under common ownership with the Company, continue to form an integral part of the broader group of ECN Capital-affiliated businesses, and be managed by their existing executive teams.
As a result of the distribution, the financial results of the Distributed Entities will no longer be consolidated with those of the Company. As a result, the Company's historical financial results may not be indicative of its future performance.
Further information regarding the Distributed Entities is included in the Company's annual information form dated February 26, 2026, which is available on the Company's profile on SEDAR+ at www.sedarplus.ca
Further details regarding the Arrangement are provided in the management information circular of the Company dated December 17, 2025, a copy of which is available under the Company's profile on SEDAR+ at www.sedarplus.ca.
ITEM 6: Reliance on subsection 7.1(2) of National Instrument 51-102
Not applicable.
ITEM 7: Omitted Information
None.
ITEM 8: Executive Officer
For further information, please contact:
Lawrence Krimker, Chief Executive Officer
T: 561-717-4772
ITEM 9: Date of Report
April 24, 2026.