KWY · Kingsway Corporation

Kingsway Financial Services Inc. (NYSE: KFS) announced the sale of its wholly owned subsidiary, Trinity Warranty Solutions LLC, to Trinity Warranty Holding LLC in a management buy-out transaction. The gross proceeds of $8.0 million consist of $5.0 million in cash at closing and $3.0 million in seller notes, which may be prepaid at a discount under certain conditions. The transaction closed on May 8, 2026. This disposition represents a successful exit for Kingsway, generating incremental capital that can be redeployed into investments aligned with its core priorities. The press release highlights that Peter Dikeos, Trinity's President and CEO, will continue to lead the business as its primary owner, ensuring continuity. The purchase agreement includes customary representations, warranties, and indemnification provisions, with a $50,000 deductible and a $500,000 liability cap for non-fundamental breaches, and an aggregate cap of $8 million. The seller notes are secured by the company equity and mature on the tenth anniversary of closing. This transaction is material as it represents a significant divestiture, providing Kingsway with liquidity and allowing it to focus on its search fund model.