ECN Capital Corp. and Skyline Champion Corporation unveiled an exciting collaboration with a share subscription agreement. Under this deal, Skyline Champion will make an equity investment of roughly US$138 million in ECN Capital.
In return, Skyline Champion will receive 33,550,000 common shares and 27,450,000 convertible preferred shares, Series E, from ECN Capital. This deal means that, upon completion, Skyline Champion will hold a notable 19.9% stake in ECN Capital, taking into account the conversion of all convertible preferred shares.
But that’s not all!
The collaboration extends further. Both corporations will co-create a captive finance company. This new enterprise will be primarily owned by Skyline Champion with a 51% stake, while 49% will belong to Triad Financial Services, Inc., a subsidiary wholly owned by ECN Capital.
This innovative finance company aims to offer a custom retail finance loan program for customers. Furthermore, it will present a new branded floorplan for both Skyline Champion and its affiliated entities, especially within the manufactured home finance domain. Triad will be responsible for delivering these services.
The goals of the finance company are clear:
Amplify demand for products by presenting a wider range of alluring financing options to Skyline Champion’s customer base.
Augment Skyline Champion’s complete homebuying services, simultaneously leveraging the perks of their online and direct-to-consumer investments.
Boost retail loan originations and floorplan balances, thereby facilitating growth and operational efficiency for Triad.
Steven Hudson, ECN Capital’s Chief Executive Officer, expressed his enthusiasm: “We’re thrilled about our enhanced partnership with Skyline Champion, a titan in the North American manufactured housing arena. This strategic move marks a pivotal moment following our review process initiated earlier this year. The inception of the new finance company forecasts immense growth prospects for Triad. Furthermore, the simultaneous equity and preferred share investments in ECN Capital highlight Skyline Champion’s faith in ECN Capital’s business approach and the worth of our platform.”
Echoing this sentiment, Mark Yost, Skyline Champion’s President and CEO, remarked: “We’re gearing up for a robust collaboration with ECN Capital, one of our trusted long-term business allies. Joining forces with Triad promises a more seamless homebuying experience for both our partners and homebuyers. This partnership paves the way for us to deliver affordable housing solutions more proficiently, propelling overall company growth. The financing solutions’ lean model, coupled with our solid financial foundation, empowers us to collaborate with ECN Capital. This partnership looks bright, promising immense benefits for stakeholders of both corporations.”
