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Enova is picking up OnDeck
Posted on Wednesday, 29 July 2020 13:11
Enova International has agreed to acquire OnDeck for USD 90.00 million to create a leading financial technology company serving consumers and small businesses.
Under the terms of the transaction, the Chicago-based acquiror is offering USD 1.38 per share, representing a 43.6 per cent premium to its 90-day volume weighted average price and a 90.4 premium based on the close of USD 0.73 on 27th July 2020.
In addition, OnDeck’s shareholders will receive USD 0.12 cents per scrip and 0.09 stocks for each one held in the company.
Following completion, expected later this year, the target will own 16.7 per cent of the combined company, with Enova will control 83.3 per cent.
Closing remains subject to shareholder approvals, among other conditions.
The transaction brings together two complementary, market-leading businesses combining world-class capabilities in consumer and small business online lending.
Enova and OnDeck both provide online lending, using data and advanced analytics and together will simplify and expand access to financial services for underserved borrowers.
The acquiror will add the target’s brand, products and services to its industry-leading portfolio to create a combined company with significant scale and diverse product offerings in consumer and small business market segments that banks and credit unions struggle to serve.
Enova and OnDeck had 4.70 billion in originations in 2019 and have served around 7.00 million customers.
The transaction will result in USD 50.00 million in annual cost synergies and around USD 15.00 million in run-rate net revenue synergies to be fully phased-in by year-end 2022.
On a pro forma basis, the combined company is expected to have a well-capitalised balance sheet and industry-leading profitability metrics.
Together, the business posted gross receivables of USD 2.40 billion at 31st March 2020 and in the year ended 31st December 2019 posted adjusted earnings before interest, taxes, depreciation and amortisation of USD 427.00 million on revenue of USD 1.65 billion.
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