ECN Capital entered into a definitive agreement to make a strategic investment in The Kessler Group. This investment represents a significant strategic opportunity for ECN to partner with Howard Kessler, his team and KG’s clients. Under the terms of the agreement, ECN Capital will invest $221.2 million in KG.

Kessler pioneered co-branded credit cards by launching the first affinity card with MBNA and helped build MBNA from its infancy to its sale to Bank of America for $35 billion. KG has since expanded beyond its credit card roots and offers a range of services to financial services institutions focused on the consumer finance industry in the U.S., Canada and Australia. These services include:

• Strategic Advisory: managing, advising and structuring credit card and other consumer portfolios for credit card issuers, banks, credit unions and payment networks
• Portfolio Advisory: portfolio transaction services
• Risk-Based Marketing: marketing expertise and funding for consumer financial products
• Multi-Channel Marketing: strategy development, multi-channel marketing analytics and planning services

“I am extremely proud of KG’s accomplishments and our role as a trusted advisor to premier financial institutions,” Kessler said. “I have spent considerable time and effort to find the right partner to assist in KG’s growth. I believe ECN is that partner.”

“Howard Kessler and his team have built a truly unique business,” said Steven Hudson, CEO of ECN Capital. “With this partnership, ECN completes its strategic repositioning from an asset-based lender to a scalable business service company that provides lending and credit services to US financial institutions.”

“Howard is a visionary entrepreneur who has built an exceptional business,” said Jim Nikopoulos, ECN Capital’s president. “The Kessler Group has shaped the payments landscape for more than three decades and adds a tremendous business services platform to ECN.”

On a pro forma basis, the investment will be immediately accretive to adjusted earnings per share (EPS) and return on equity (ROE). The transaction, which is expected to close in Q2/18, is subject to customary closing conditions.

Macquarie Capital and National Bank of Canada acted as transaction advisors and BMO and CIBC acted as financial advisors. Baker Hostetler and Ropes and Gray acted as legal advisors.