Dealnet Closes the Acquisition of EcoHome Financial

TORONTO, ONTARIO--(Marketwired - Feb. 18, 2016) -

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Dealnet Capital Corp. ("Dealnet" or the "Company") (TSX VENTURE:DLS) today announced that it has closed the previously announced acquisition of EcoHome Financial Inc. ("EcoHome"), a premier non-bank lender in the Canadian heating, ventilation and air conditioning (HVAC) and home improvement segments, from Chesswood Group Limited (the "Acquisition") for total consideration of approximately $35 million.

Pursuant to an amendment to the share purchase agreement dated February 17, 2016, the consideration paid for the Acquisition consisted of (i) $29 million in cash, (ii) 6,039,689 common shares of Dealnet having an aggregate value of $3.5 million; and (iii) a two-year unsecured convertible vendor take-back note in the principal amount of $2.5 million that bears interest at a rate of 6.0% per annum and is convertible by the holder into common shares of Dealnet at a conversion price of $0.64 per share.

In connection with the Acquisition, the Company previously issued 54,545,700 subscription receipts (the "Subscription Receipts") at a price of $0.55 per Subscription Receipt for gross proceeds of approximately $30 million (the "Offering"). All of the Subscription Receipts issued pursuant to the Offering have been exchanged for common shares of Dealnet on a one-for-one basis as of today's date. The net proceeds of the Offering have been released from escrow and were used to pay a portion of the purchase price of the Acquisition.

EcoHome has a seasoned, profitable loan book of over $60 million and a year over year origination growth rate of approximately 40%. The EcoHome portfolio consists of long term finance assets that have historically predictable revenue and cash flows. It operates on the same loan management software as Dealnet, making integration a straightforward process. Key EcoHome underwriters have transferred and/or increased their line capacity with the deal in support of the transaction and continued growth.

"This significant transaction elevates Dealnet's lending business to a leading competitive position in this sector. The quality of the loan book within the home improvement space is demonstrated by 0.25% loan loss rates net of recoveries which continues to attract low cost underwriting," said Michael Hilmer, Dealnet's Chief Executive Officer.

As part of the Acquisition, Dealnet acquires all customer contracts, vendor finance agreements, employees, operating platform, systems, agreements and other assets of EcoHome. Dealnet plans to combine treasury functions, technology, risk and credit management and overall origination capabilities with no job loss due to the considerable growth trajectory demonstrated by EcoHome and Dealnet.

"We are particularly pleased with the strong institutional support from our bankers and underwriters for our aggressive profitable growth strategy as we accelerate our plans to become one of the leading non-bank consumer lenders" said Dr. Steven Small, Dealnet's Executive Chairman.

About Dealnet Capital Corp.

Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to dealer origination growth.

Forward Looking Statements

This release includes forward-looking statements regarding Dealnet, its business and the Acquisition. Such statements are based on the current expectations and views of future events of Dealnet's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "become", "continue", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Forward-looking statements in this release include those related to the anticipated benefits of the Acquisition, the anticipated growth in originations and financial revenue, the integration of the Acquisition with the Company and the expected impact of the Acquisition on the Company's business and its reach into new and existing markets. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Dealnet, including risks relating to the challenges in integrating the business and product lines of Dealnet and EcoHome, general risks regarding the consumer finance industry, and many other factors beyond the control of the Company. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Dealnet undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

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