Wells Fargo to Acquire GE Capital’s Commercial Distribution Finance and Vendor Finance Businesses
October 13 2015 - 9:00AM
Business Wire
Acquisition also includes a portion of
Corporate Finance business
Wells Fargo & Company (NYSE: WFC) announced today that it
has signed an agreement to purchase GE Capital’s Commercial
Distribution Finance and Vendor Finance platforms as well as a
portion of its Corporate Finance business. The acquisition includes
total assets of approximately $32 billion as well as businesses
employing approximately 3,000 team members. The loan and lease
portfolios are roughly 90 percent U.S.- and Canada-based. The
transaction is expected to close in the first quarter of 2016.
Other terms of the transaction were not disclosed.
“This acquisition is an outstanding opportunity for Wells Fargo
to deepen relationships and strengthen our presence in key
commercial lending markets,” said Tim Sloan, head of Wells Fargo
Wholesale Banking. “GE Capital’s businesses are industry leaders
with proven business models and capabilities backed by
exceptionally talented and experienced teams. These advantages, in
addition to portfolios that are diversified geographically and by
industry, will allow Wells Fargo to continue to grow our business
in order to better serve the needs of new and existing Wholesale
Banking customers.”
Commercial Distribution Finance
GE Capital’s Commercial Distribution Finance (CDF) business is a
market leader in providing customized inventory financing to fund
the flow of finished durable goods from manufacturers to dealers.
Through industry expertise and integrated technologies, CDF helps
manufacturers and dealers improve cash flow, reduce risk and grow
sales. CDF’s inventory finance products and deep customer
relationships will greatly complement and expand existing
asset-based lending product offerings in Wells Fargo’s Capital
Finance division.
- Total assets of approximately $13
billion(1)
- Approximately 2,000 Original Equipment
Manufacturers (OEM)s and 40,000 dealers
- 80% of customers in the U.S. and
Canada
- Key industry sectors: motorsports,
marine, recreational vehicle, outdoor products, electronics &
appliances, and technology
- $49.9 billion in volume in 2014
Vendor Finance
GE Capital’s Vendor Finance business provides vendor and dealer
financing programs for manufacturers and dealers of all sizes, and
their customers, across the U.S. and Canada, from Fortune 500
companies looking to offer private label financing to independent
operations looking to manage cash flow. The business drives vendor
sales growth by supporting dealers with inventory financing and by
providing leases and loans to commercial end-user customers. As a
leading provider of technology-enabled white label captive program
and channel financing solutions, GE’s Capital’s Vendor Finance
business will significantly expand Wells Fargo’s current
capabilities within its Equipment Finance business.
- Total assets of approximately $9
billion(1)
- 40+ Equipment OEMs; 3,300 dealers; and
over 160,000 end-user borrowers
- Operates in the U.S. and Canada
- Key industry sectors: office imaging,
construction, and technology / industrials
- $6.7 billion in originations in
2014
Corporate Finance
GE Capital’s Corporate Finance business (also known as Direct
Lending and Leasing) provides senior secured asset-based loans as
well as equipment leases and loans to middle-market customers.
Wells Fargo is purchasing a portion of the business, which will
ultimately be integrated into its existing Capital Finance and
Equipment Finance businesses.
- Total assets of approximately $10
billion(1)
- 200 lending customers and 3,400 leasing
customers
- Operates in the U.S. and Canada
- Key industry sectors: food &
beverage, retail, metals, forestry, oil & gas, marine,
automotive, aerospace, and construction
Advisors
Wells Fargo Securities served as financial advisor and Mayer
Brown served as legal advisor.
About Wells Fargo Capital Finance
Wells Fargo Capital Finance is the trade name for certain
asset-based lending services, senior secured lending services,
accounts receivable and purchase order finance services, and
channel finance services of Wells Fargo & Company and its
subsidiaries, and provides traditional asset-based lending,
specialized senior and junior secured financing, accounts
receivable financing, purchase order financing and channel finance
to companies across the United States and internationally.
Dedicated teams within Wells Fargo Capital Finance provide
financing solutions for companies in specific industries such as
retail, software publishing and high-technology, commercial
finance, staffing, government contracting and others. For more
information, visit wellsfargocapitalfinance.com.
About Wells Fargo Equipment Finance
Wells Fargo Equipment Finance provides competitive fixed- and
floating-rate loans and leases covering a full range of commercial
equipment for businesses nationwide, as well as floor planning and
inventory financing and vendor programs in selected industries in
the United States and Canada. Wells Fargo Equipment Finance is one
of the leading bank-affiliated equipment leasing and finance
businesses in the United States by asset portfolio and annual
originations, with more than 130,000 customers and 1,100 team
members. Wells Fargo Equipment Finance is the trade name of the
equipment finance businesses of Wells Fargo Bank, N.A. and its
subsidiaries. Canadian business is transacted by Wells Fargo
Equipment Finance Company.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.7 trillion in
assets. Founded in 1852 and headquartered in San Francisco, Wells
Fargo provides banking, insurance, investments, mortgage, and
consumer and commercial finance through 8,700 locations, 12,800
ATMs, the internet (wellsfargo.com) and mobile banking, and has
offices in 36 countries to support customers who conduct business
in the global economy. With approximately 266,000 team members,
Wells Fargo serves one in three households in the United States.
Wells Fargo & Company was ranked No. 30 on Fortune’s 2015
rankings of America’s largest corporations. Wells Fargo’s vision is
to satisfy our customers’ financial needs and help them succeed
financially. Wells Fargo perspectives are also available at Wells
Fargo Blogs and Wells Fargo Stories.
Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements about our
future financial performance and business. Because forward-looking
statements are based on our current expectations and assumptions
regarding the future, they are subject to inherent risks and
uncertainties. Do not unduly rely on forward-looking statements as
actual results could differ materially from expectations.
Forward-looking statements speak only as of the date made, and we
do not undertake to update them to reflect changes or events that
occur after that date. For information about factors that could
cause actual results to differ materially from our expectations,
refer to our reports filed with the Securities and Exchange
Commission, including the discussion under “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2014, as
filed with the Securities and Exchange Commission and available on
its website at www.sec.gov.
(1) As of June 30, 2015
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version on businesswire.com: http://www.businesswire.com/news/home/20151013006060/en/
Wells Fargo & CompanyMediaTrisha Schultz,
314-875-3863trisha.schultz@wellsfargo.comorElise Wilkinson,
704-374-6512elise.wilkinson@wellsfargo.comorInvestorsJim
Rowe, 415-396-8216jim.rowe@wellsfargo.com
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