Blakes and Stikeman Elliott acting as legal counsel
ECN Capital Corp. is set to be acquired by a Warburg Pincus-led investor group in a deal valued at $1.9 billion, marking another major private equity move in the financial services sector as policy conditions ease.
Under the terms of the agreement, the newly formed acquisition vehicle will purchase all outstanding common shares of ECN Capital for $3.10 per share in cash. Holders of the company’s cumulative 5-year minimum rate reset preferred shares, Series C, will receive $26.00 per share in cash, plus any accrued but unpaid dividends. Champion Homes, Inc., the sole owner of ECN’s mandatory convertible preferred shares, Series E, will be paid $3.10 per share, also in cash, along with accrued but unpaid dividends.
The transaction will take ECN Capital private after more than nine years on the Toronto Stock Exchange, following its 2016 spin-off from Element Financial. The Toronto-based firm manages assets totaling US$7.6 billion and provides business services to a range of North American financial institutions, including banks, insurance companies, pension plans, and credit unions.
Warburg Pincus, headquartered in New York, is a global private equity powerhouse with a long history of investments across sectors.
Champion Homes has signed a support and voting agreement for the deal, and all ECN Capital directors and executive officers have entered into similar agreements. Together, these parties control about 18.8 percent of ECN’s outstanding common shares and all Series E shares. In total, shareholders representing roughly 26 percent of the company’s voting power have committed to support the transaction.
The arrangement agreement includes standard deal protections, such as a non-solicitation clause, though ECN Capital retains the right to consider superior proposals under certain conditions. Should the company back out in favor of a better offer, it would owe a $35.4 million termination fee. Conversely, if the deal falls through under specific circumstances, the buyer would pay a $53.1 million reverse termination fee.
“ECN Capital has evolved from an on-balance sheet commercial finance business into an asset-light company focused on acquiring under-appreciated businesses, improving them, and realizing greater returns—most notably the acquisition of Service Finance for US$309 million in 2017 and its subsequent sale for US$2 billion in 2021, which supported a $7.50 special dividend to shareholders. To date, we have delivered shareholder returns of over 200 percent, and this transaction creates a liquidity event and provides a further return of capital opportunity for our shareholders,” ECN Capital CEO Steven Hudson said in a press release.
Blake, Cassels & Graydon LLP and Baker & Hostetler LLP served as legal counsel to ECN Capital, with CIBC Capital Markets as the lead financial advisor. On the buyer’s side, Stikeman Elliott LLP, Wachtell, Lipton, Rosen & Katz, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Mayer Brown LLP provided legal counsel, while Macquarie Capital, BMO Capital Markets, and Truist Securities acted as financial advisors.
The deal comes amid a broader trend of buyouts financed with a mix of cash and stock, as the cost gap between equity and debt narrows. In August, Guardian Capital Group agreed to a $1.67 billion privatization by Desjardins Global Asset Management.
The ECN Capital transaction is expected to close in the first half of 2026, pending court approval and other customary conditions.
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