XS Financial announced the closing of its agreement to be taken private by Mavik Capital Management, a multi-strategy investment firm with a flexible strategy across hard assets, and Axar Capital Management, a value-oriented alternative asset management firm focused on North American middle market opportunities.

The Transaction establishes XS as a private company and positions it to expand its platform in the growing equipment financing space. With the deep lending expertise and collective resources of both Mavik and Axar, XS will be able to further scale and diversify its offerings to provide flexible financing solutions that meet the evolving needs of middle-market U.S. businesses across a variety of industries.

Vik Uppal, Founder and CEO of Mavik, commented:"With the U.S. equipment finance industry now a trillion-dollar industry, we see a substantial opportunity ahead for XS given its attractive portfolio, robust network of borrower and vendor relationships, and the beneficial supply-demand dynamics across its growing segment of the middle market. This transaction was a natural fit for Mavik because it not only closely aligns with our strategic focus on credit investments in the hard assets space, but it also represents a synergistic addition to our ecosystem that will benefit both Mavik and XS lending partners. We look forward to collaborating with the XS Team as we build on the solid foundation they have established over the past seven years and explore new growth avenues together."

Andrew Axelrod, Founder and Managing Partner at Axar, commented: "XS is at a critical inflection point in its growth trajectory, and we believe it will be better positioned to capitalize on the opportunities ahead in the robust equipment finance market as a private company. Together with Mavik, we will be able to leverage our collective experience and expertise to help XS further diversify its customer base while building on its long-standing borrower and vendor relationships."

David Kivitz, CEO of XS, commented: "We are thrilled to partner with Mavik and Axar, two experienced credit investors with a strong history of collaboration and innovation that makes them the ideal partners for XS. Both Mavik and Axar bring a deep understanding of the unique needs of our borrowers, coupled with exceptional track records in middle-market investing, which will differentiate us for our customers, partners and team moving forward. As a private company, we will now have the flexibility to scale our business and expand into new verticals, capitalizing on the growing demand for CAPEX financing in the market."

XS previously announced that it had entered into a definitive agreement to be taken private on June 24, 2024, and the Transaction was approved by XS securityholders at the Company's general and special meeting held on September 9, 2024.

Under the terms of the Transaction, Mavik and Axar acquired all of the issued and outstanding subordinate voting shares ("SV Shares") and proportionate voting shares ("PV Shares") of XS for a cash purchase price of Cdn$0.05265 per SV Share and Cdn$52.65 per PV Share. All stock options and share purchase warrants outstanding immediately prior to the effective time of the Transaction were automatically cancelled without any payment to the holders. The Transaction was effected by way of a court-approved plan of arrangement under Section 288 of the Business Corporations Act (British Columbia).

As a result of the closing of the Transaction, XS's subordinate voting shares (XSF) will be delisted from the Canadian Securities Exchange and the OTCQB.

Compass Point Research & Trading LLC and Gramercy Capital Group, LLC (through INTE Securities LLC, member FINRA/SIPC) acted as financial advisors to XS. Fogler, Rubinoff LLP and Michael Bluestein acted as legal advisors to the XS.

Alston & Bird LLP served as legal advisor to Mavik, and Schulte Roth & Zabel LLP and Blake, Cassels & Graydon LLP served as legal advisors to Axar.