TORONTO, ONTARIO--(Marketwired - Dec. 23, 2016) - Dealnet Capital Corp. ("Dealnet" or the "Company") (TSX VENTURE:DLS) is pleased to announce that it has executed an agreement to acquire a portfolio of long term consumer finance rental contracts worth approximately $29 million from a prominent dealer who operates in one of the Company's key verticals.
The portfolio consists of approximately 3,000 individual consumer contracts for the rental of approximately 5,000 pieces of HVAC equipment located mainly in Ontario. This portfolio is consistent with Dealnet's existing portfolio, having historically demonstrated low default rates and predictable cash flows. Dealnet also expects to execute a separate funding agreement for ongoing new originations with this partner.
Total consideration for the portfolio will consist of a cash payment on closing of $22.5 million less certain adjustments, along with the issuance of 12,523,364 common shares valued at $6.7 million. On closing of the transaction, the Company will simultaneously securitize certain contracts from the portfolio to fund the cash portion of the transaction. The common shares issued pursuant to the transaction will be subject to a hold period of four months from the date of issue. Additionally, the common shares will be subject to a three year timed release escrow commencing on closing.
The acquisition is expected to close in early 2017, and is subject to certain customary closing conditions, including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.
This news release contains certain "forward-looking information" within the meaning of applicable securities law including statements regarding the Company. Forward looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking 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. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
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 them resulting in dealer origination growth.
For additional information please visit www.sedar.com.
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