PNC to Acquire ECN Capital’s U.S. Commercial, Vendor Finance Business

PNC Financial Services entered a definitive agreement to acquire the U.S.-based commercial and vendor finance business of ECN Capital for cash proceeds of approximately $1.253 billion.

PNC will purchase for cash ECN Capital’s U.S. C&V business which includes a $1.1 billion portfolio of construction, transportation, industrial, franchise and technology loans and leases. Based in Horsham, PA, ECN Capital’s U.S. C&V business is complementary to that of the PNC Equipment Finance business, serving industries and a client size that have not historically been the focus of PNC.

“The acquisition of ECN Capital’s U.S. C&V business significantly enhances our existing vendor franchise, adding a national platform supporting leading vendors in several growing industries,” said Mike Lyons, executive vice president and head of Corporate & Institutional Banking at PNC. “Moving forward, we will be able to help these vendors and their clients by leveraging PNC’s strong capital and liquidity position to offer an expanded range of financing.”

Upon completion of the transaction, all employees of the acquired business will be employed by PNC Bank, and the acquired loans and leases will be included in the PNC Equipment Finance business of the Corporate & Institutional Banking segment. PNC will also retain the lease to ECN Capital’s existing office in Horsham. PNC expects the transaction to be seamless for ECN Capital’s clients and vendors, who will continue to work with the existing ECN Capital team.

The acquisition is expected to be modestly accretive to 2017 earnings per share. The transaction is subject to customary closing conditions and is currently expected to be completed in Q2/17.

“Over the last five years, ECN Capital has built market-leading platforms in Canada and the United States in both rail finance and in commercial and vendor finance,” said Steven Hudson, ECN Capital’s CEO. “The process of selling our US C&V Finance operations, which was led by ECN Capital’s Chief Operating Officer Jim Nikopoulos, began last year and has culminated in a transaction that will enable this business to continue producing quality growth and strong returns under the ownership of one of the leading banks in the U.S.”

Citigroup Global Markets is serving as financial advisor and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to PNC. Macquarie Capital acted as lead financial advisor on the transaction for ECN Capital, together with assistance from Morgan Stanley and BMO Capital Markets. Dechert provided the company with legal advice in connection with the transaction.

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