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Kingsway (NYSE: KFS) exits Trinity Warranty Solutions in $8M management buy-out

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Kingsway Financial Services Inc. has sold all of the equity of Trinity Warranty Solutions LLC to Trinity Warranty Holding LLC in a management buy-out. The transaction delivers gross proceeds of $8.0 million, consisting of $5 million in cash at closing and $3 million in secured subordinated seller notes.

The seller notes are payable no later than the tenth anniversary of closing and may be prepaid at a discount under certain conditions. The purchase agreement includes customary representations, warranties, covenants and mutual indemnification obligations, with specified deductibles and liability caps, and most representations surviving for eighteen months.

Positive

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Negative

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Insights

Kingsway monetizes Trinity for $8M in a structured management buy-out.

Kingsway, through a subsidiary, sold Trinity Warranty Solutions LLC for gross proceeds of $8.0 million, split between $5 million cash and $3 million in secured subordinated seller notes. This converts a cash‑generating asset into capital that can be redeployed within Kingsway’s acquisition-focused model.

The seller notes are secured by the sold equity and are due by the tenth anniversary, with optional early prepayment at a discount if conditions are met. Indemnity terms include a $50,000 deductible, a $500,000 cap for most representations, and an aggregate cap of $8 million, aligning risk with deal size.

Management statements highlight Trinity’s prior role as a reliable cash flow contributor and frame the sale as a successful exit. Future filings may clarify how Kingsway reinvests the proceeds and how the divestiture affects its portfolio earnings mix.

Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 7.01 Regulation FD Disclosure Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Gross proceeds from Trinity sale $8.0 million Total consideration for sale of Trinity Warranty Solutions LLC
Cash at closing $5 million Cash paid to Kingsway subsidiary at closing
Seller notes $3 million Secured subordinated promissory notes payable by buyer
Deductible for indemnity $50,000 Deductible for most representation and warranty claims
Liability cap for most reps $500,000 Cap on seller liability for non-fundamental representations
Aggregate liability cap $8 million Maximum aggregate liability cap excluding fraud
Survival period 18 months Standard survival for representations and warranties after closing
Seller notes maturity 10 years Promissory notes payable no later than tenth anniversary of closing
Membership Interest Purchase Agreement financial
"entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Trinity Warranty Holding LLC"
A membership interest purchase agreement is a contract used when someone buys an ownership stake in a limited liability company (LLC). It spells out what is being sold, the price, any promises about the business’s condition, and who takes responsibility for debts or legal issues—like a receipt and rulebook for the sale. Investors care because it transfers control, affects future cash flow and liabilities, and can change the value and tax treatment of their investment.
secured subordinated promissory notes financial
"payable in the form of secured subordinated promissory notes made by Buyer in favor of Kingsway Seller"
fundamental representations financial
"a deductible of $50,000 (other than with respect to fundamental representations)"
indemnification obligations financial
"Kingsway Seller is also subject to customary indemnification obligations related to inaccuracies in or breaches of any representations or warranties"
A company's indemnification obligations are promises it has made to cover certain losses, legal costs, or damages that another party might suffer because of the company’s actions or events tied to a deal. Think of it like a guarantee or built-in insurance: if something goes wrong, the company must step in and pay. For investors this matters because these potential payouts create contingent liabilities that can reduce cash, raise legal exposure, and affect a company’s value and risk profile.
Regulation FD Disclosure regulatory
"Item 7.01 Regulation FD Disclosure. On May 11, 2026, the Company issued a press release"
Regulation FD disclosure requires public companies to share important, market-moving information with everyone at the same time instead of tipping off analysts or large investors first. Think of it as making sure all players on a field hear the same announcement simultaneously; that fairness helps investors trust that stock prices reflect the same information and reduces the risk of sudden, unfair trading advantages or regulatory penalties for selective leaks.
Search Fund model financial
"the only publicly-traded US company employing the Search Fund model to acquire and build great businesses"
An investment approach where an entrepreneur raises money from backers to hunt for, buy, and run one privately held company; investors fund both the search and the acquisition in exchange for an ownership stake. Think of it like hiring a scout to find and operate a promising small business: it can deliver outsized, long-term returns if the manager succeeds, but it is concentrated, hands-on, and usually illiquid, so investor selection and trust in the operator matter.
Understanding 8-K Material Events →
false 0001072627 0001072627 2026-05-11 2026-05-11
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): May 8, 2026
 
KINGSWAY FINANCIAL SERVICES INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
(State or Other Jurisdiction of Incorporation)
  
001-15204
(Commission File Number)
  
85-1792291
(IRS Employer Identification No.)
 
10 S. Riverside Plaza, Suite 1520, Chicago, IL 60606
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s Telephone Number, Including Area Code: (312) 766-2138
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
KFS
New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company         ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 
 
 
Item 1.01         Entry into a Material Definitive Agreement.
 
On May 8, 2026, Kingsway Warranty Holdings LLC (“Kingsway Seller”), a wholly owned subsidiary of Kingsway Financial Services Inc. (“Kingsway”), entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Trinity Warranty Holding LLC (“Buyer”), pursuant to which, subject to the terms and conditions of the Purchase Agreement, Kingsway Seller sold to Buyer all of the issued and outstanding equity interests (the “Company Equity”) of Trinity Warranty Solutions LLC, a Delaware limited liability company (the “Company”). The acquisition closed on May 8, 2026.
 
Pursuant to the terms of the Purchase Agreement, the aggregate consideration for the purchase and sale of the Company Equity is equal to the sum of (i) $5 million, paid in cash to Kingsway Seller at the closing, and (ii) $3 million payable in the form of secured subordinated promissory notes made by Buyer in favor of Kingsway Seller (the “Promissory Notes”). The consideration is subject to adjustment based on the final determination of the amount of indebtedness, working capital, transaction expenses, and cash of the Company as of the closing.
 
The Promissory Notes are payable to Kingsway Seller no later than the tenth anniversary of the closing. Buyer shall be entitled to prepay the Promissory Notes at any time subject to the repayment schedule set forth in the Promissory Notes. The Promissory Notes are secured by the Company Equity, subject to certain exceptions set forth in the Promissory Notes.
 
The Purchase Agreement contains customary representations, warranties and covenants of Kingsway Seller, including, but not limited to, representations and warranties about the Company’s capitalization, absence of litigation, financial statements, intellectual property, taxes, employee benefit plans, employee and labor matters, environmental compliance, real property, and absence of certain changes or events.
 
Kingsway Seller is also subject to customary indemnification obligations related to inaccuracies in or breaches of any representations or warranties under the Purchase Agreement, and breaches or non-fulfillments of Kingsway Seller’s or the Company’s covenants under the Purchase Agreement, subject, in the case of inaccuracies in or breaches of representations or warranties, to a deductible of $50,000 (other than with respect to fundamental representations), a liability cap equal to $500,000 (other than with respect to fundamental representations), and a maximum aggregate liability cap equal to $8 million, in each case other than losses resulting from fraud.
 
Buyer also made customary representations, warranties and covenants, including, but not limited to, representations and warranties about Buyer’s absence of litigation, solvency, investment purpose, and financial ability to consummate the transaction. Buyer is also subject to customary indemnification obligations related to inaccuracies in or breaches of any representations or warranties under the Purchase Agreement, and breaches or non-fulfillments of Buyer’s covenants under the Purchase Agreement.
 
The representations and warranties contained in the Purchase Agreement will survive the closing for eighteen months; provided that fundamental representations will survive the closing for the applicable statute of limitations plus sixty days.
 
2
 
 
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference. The representations, warranties and covenants contained in the Purchase Agreement were made only for the purposes of the Purchase Agreement, were made as of specific dates, were made solely for the benefit of the parties to the Purchase Agreement and may not have been intended to be statements of fact but, rather, as a method of allocating risk and governing the contractual rights and relationships among the parties to the Purchase Agreement. The assertions embodied in those representations and warranties may be subject to important qualifications and limitations agreed to by the parties to the Purchase Agreement in connection with negotiating their respective terms. Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from what may be viewed as material to stockholders. For the foregoing reasons, none of Kingsway’s stockholders or any other person should rely on such representations and warranties, or any characterizations thereof, as statements of factual information at the time they were made or otherwise.
 
Item 7.01         Regulation FD Disclosure.
 
On May 11, 2026, the Company issued a press release announcing the disposition of Trinity Warranty Solutions LLC. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
The information contained in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
 
Item 9.01         Financial Statements and Exhibits.
 
(d)          Exhibits.
 
The following exhibits are furnished as a part of this report:
 
Exhibit
Number
  
Description
     
10.1
  
Membership Interest Purchase Agreement, dated May 8, 2026, by and between Kingsway Warranty Holdings LLC and Trinity Warranty Holding LLC.
     
99.1
  
Press Release issued May 11, 2026 by Kingsway Financial Services Inc.
     
104
  
Cover Page Interactive Data File
 
3
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 KINGSWAY FINANCIAL SERVICES INC.
Date: May 11, 2026 
By:
/s/ Kent A. Hansen
Name:   Kent A. Hansen
Title:     Chief Financial Officer
 
4

Exhibit 99.1

 

 logo01.jpg

KINGSWAY ANNOUNCES SALE OF

TRINITY WARRANTY SOLUTIONS

 

-- Management Buy-Out Transaction --

-- Gross Proceeds of $8.0 million --

-- Cash at Close of $5.0 million plus Seller Notes of $3.0 million --

 

Chicago – May 11, 2026 - (NYSE: KFS) Kingsway Financial Services Inc. (“Kingsway” or the “Company”), the only publicly-traded US company employing the Search Fund model to acquire and build great businesses, today announced the sale of Trinity Warranty Solutions LLC (“Trinity”) for gross proceeds of $8.0 million, consisting of $5 million cash at closing plus an additional $3 million in seller notes that may be paid off early for a discount if certain conditions are met. The transaction closed on Friday, May 8, 2026.

 

“This transaction is a wonderful outcome for both Kingsway and Trinity,” said JT Fitzgerald, Kingsway’s President and CEO. “For Kingsway, today’s announcement marks the successful exit of a business that has generated reliable cash flow during our ownership period. By monetizing the business, we are tapping into incremental capital that can be redeployed to investments that align with our core priorities. I am also pleased that Peter Dikeos, the President and CEO of Trinity, will continue to lead Trinity as the business’s primary owner going forward. Peter has been a great partner to Kingsway, and I wish Peter and his entire team every success in the future.”

 

"Kingsway has been an outstanding partner to Trinity, and I'm grateful for Kingsway’s support helping us build a stronger business over the years,” said Mr. Dikeos. “I'm excited to lead Trinity into its next chapter alongside a team I deeply respect as we continue delivering exceptional service to our customers across the country.”

 

About Trinity

 

Trinity sells and administers warranty products for HVAC, standby generators, commercial LED lighting, and refrigeration equipment across the United States, acting as an agent for third-party insurers that underwrite these contracts. Trinity also provides equipment breakdown and maintenance support services, serving as a single point of contact and coordinating repairs through contracted service providers.

 

About the Company

 

Kingsway Financial Services Inc. is the only publicly-traded US company employing the Search Fund model to acquire and build great businesses.

 

Kingsway owns and operates a collection of high-quality B2B and B2C services companies that are asset-light, growing, profitable, and that have recurring revenues. Kingsway seeks to compound long-term shareholder value on a per share basis via its decentralized management model, its talented team of operators, and its tax-advantaged corporate structure.

 

 
 

 

Additional Information

 

Additional information about Kingsway, including a copy of its Annual Reports can be accessed on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov, on the Canadian Securities Administrators' website at www.sedar.com, or through the Company's website at www.kingsway-financial.com.

 

For Investor Inquiries:
Hayden IR
James Carbonara
(646) 755-7412

james@haydenir.com

 

For Company Inquiries:

Kingsway Financial Services Inc.

Kent Hansen, CFO

(312) 766-2163

khansen@kingsway-financial.com

 

 

Source: View Original Filing on SEC EDGAR

FAQ

What transaction did Kingsway Financial Services (KFS) announce regarding Trinity Warranty Solutions?

Kingsway sold all equity in Trinity Warranty Solutions LLC in a management buy-out for gross proceeds of $8.0 million. The consideration includes $5 million cash at closing and $3 million in secured subordinated seller notes issued to a Kingsway subsidiary.

How is the $8.0 million consideration for Trinity Warranty Solutions structured for KFS?

The deal totals $8.0 million, split between cash and seller notes. Kingsway received $5 million in cash at closing and $3 million in secured subordinated promissory notes, which are payable no later than the tenth anniversary and may be prepaid at a discount if conditions are met.

Who bought Trinity Warranty Solutions from Kingsway Financial Services (KFS)?

Trinity Warranty Holding LLC purchased all of the equity of Trinity Warranty Solutions LLC from a Kingsway subsidiary. The transaction is characterized as a management buy-out, with Trinity’s President and CEO Peter Dikeos becoming the primary owner going forward.

What indemnification limits are included in the Trinity sale agreement for KFS?

Kingsway’s subsidiary faces a $50,000 deductible and a $500,000 liability cap for most representations, plus an $8 million aggregate cap. Fundamental representations have different treatment, and these caps do not apply to losses resulting from fraud under the purchase agreement.

How long do the representations and warranties survive in the KFS Trinity sale agreement?

Most representations and warranties survive for eighteen months after closing. Fundamental representations survive longer, through the applicable statute of limitations plus sixty days, providing an extended period for potential claims tied to core assurances in the agreement.

What business does Trinity Warranty Solutions conduct, according to Kingsway’s disclosure?

Trinity sells and administers warranty products for HVAC and related equipment across the United States. It acts as an agent for third-party insurers, coordinates equipment breakdown and maintenance services, and manages repairs through contracted service providers, serving customers nationwide.

Filing Exhibits & Attachments

6 documents

Press Releases

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