EverBank to Acquire Business Property Lending from GE Capital
EverBank Financial and GE Capital announced that they have executed a definitive agreement under which EverBank, a subsidiary of the company, will acquire Business Property Lending, business unit of GE Capital Real Estate, North America.
Business Property originates and services commercial real estate loans for essential use properties owned or leased by small- and mid-sized businesses nationwide.
Under the terms of the agreement, EverBank will acquire the stock of Business Property Lending, which at the closing of the transaction will hold the origination and servicing platform for Business Property, for a purchase price of $2.51 billion in cash. No debt will be assumed in the acquisition. The transaction includes approximately $2.44 billion of performing commercial loans, the origination and servicing platforms, 108 employees and servicing rights on $3.1 billion of loans securitized by GE Capital. The transaction is expected to close in the fourth quarter of 2012, subject to regulatory approval and customary closing conditions.
“Today’s announcement represents a compelling strategic expansion into business property lending in key metropolitan areas where EverBank currently has significant lending, leasing and deposit customers,” commented Robert Clements, chairman of the board and chief executive officer of the company. “We believe this fully integrated, high quality franchise will accelerate EverBank’s strategic growth plans and will further enhance and diversify our robust, nationwide asset generation capabilities. In addition, the financial benefits of the transaction are attractive, resulting in near term accretion to EPS and ROE.”
Key metrics associated with the transaction include: Immediate low double digit EPS accretion; ~100 bps ROE accretion; Pro forma assets of $16.2 billion(1); Pro forma Tier 1 common ratio of 11.8%(1)
Business Property currently has 14 offices located in Redmond, WA, San Francisco, CA, Pleasanton, CA, Irvine, CA, Chicago, IL, St. Louis, MO, Austin, TX, Houston, TX, Alpharetta, GA, Shelton, CT, Norwalk, CT, Fort Washington, PA, Orlando, FL and Jupiter, FL. EverBank expects to retain the management team and grow the business from current levels. The acquisition will add high quality nationwide commercial origination and loans, which the company anticipates will diversify EverBank’s balance sheet and asset generation.
“We are excited to bring on board an experienced, well managed team with a history of strong origination volume and credit quality to strategically expand EverBank’s asset generation capabilities and customer product offering,” added Blake Wilson, the company’s president and chief operating officer. “We expect the diversification benefits to our product offering, loan portfolio, asset generation and earnings from this transaction will be strong.”
Alec Burger, president, GE Capital Real Estate, North America division said, “The sale of Business Property to EverBank is a strong strategic win and is consistent with our stated strategy to reduce the overall size of our real estate portfolio. We are excited by this new chapter for the Business Property team.”