Chase to Purchase Collegiate Funding Services, Creating a Comprehensive Education Finance Business
December 15 2005 - 7:00AM
PR Newswire (US)
CHICAGO and FREDERICKSBURG, Va., Dec. 15 /PRNewswire-FirstCall/ --
JPMorgan Chase Bank, N.A. (NYSE:JPM) has signed a definitive
agreement to purchase Collegiate Funding Services, Inc.
(NASDAQ:CFSI), a leader in student loan servicing and
consolidation, to create a comprehensive education finance
business, the companies announced today. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051215/NYTH056LOGO
http://www.newscom.com/cgi-bin/prnh/20050714/DCTH039LOGO ) Chase
will pay $20 per share in cash, for total consideration of
approximately $663 million, for Collegiate Funding Services. In
2004, Chase Education Finance originated $7.9 billion and
Collegiate Funding Services originated $4.4 billion in student
loans, including Federal Family Education Loan Program and private
loans. Collegiate Funding Services serviced approximately $12.1
billion in loans as of September 30, 2005. "Collegiate Funding
Services' marketing, origination and servicing capabilities will
complement our sales and marketing expertise," said Brad L. Conner,
executive vice president of Chase. "Together, we will be a major
provider of every type of student loan as we help students and
their parents achieve their educational goals. Both Chase and CFS
schools should expect continued excellence from the combined
business." Upon completion of the transaction, J. Barry Morrow,
president and chief executive officer of Collegiate Funding
Services, will become president of the combined Chase Education
Finance business. He will report to Conner, who has responsibility
for home equity and education lending at Chase. "This combination
is a great opportunity for CFS and our customers, employees and
shareholders," Morrow said. "We will be joining forces with a
powerful brand and a recognized leader in financial services, and
CFS employees will play a key role in the combined business." The
combined business will be headquartered in Fredericksburg, Va., the
current home of Collegiate Funding Services, and will maintain
other sites, including Jackson, Miss.; Indianapolis, Tampa and
Boston. The companies expect the purchase, which is subject to CFS
shareholder and regulatory approval, to close in the first quarter
of 2006. The Lightyear Fund, L.P., which is the largest shareholder
of CFS, has agreed to vote its shares in favor of the transaction.
About Chase Chase, the U.S. consumer and commercial banking brand
of JPMorgan Chase & Co., has issued approximately 98 million
credit cards and serves consumers and small businesses through more
than 2,500 bank branches, 7,100 ATMs and 225 mortgage offices as
well as through relationships with over 15,000 auto dealerships,
2,500 schools and universities and 2,100 insurance agencies.
JPMorgan Chase is a leading global financial services firm with
assets of $1.2 trillion and operations in more than 50 countries.
The firm is a leader in investment banking, financial services for
consumers and businesses, financial transaction processing, asset
and wealth management, and private equity. Under the JPMorgan,
Chase and Bank One brands, the firm serves millions of consumers in
the United States and many of the world's most prominent corporate,
institutional and government clients. Information about the firm is
available at http://www.jpmorganchase.com/. About Collegiate
Funding Services Collegiate Funding Services is a leading education
finance company dedicated to providing students and their families
with the practical advice and loan solutions they need to help
manage and pay for the cost of higher education. Collegiate Funding
Services also offers a comprehensive portfolio of education loan
products and services - including loan origination, loan servicing
and campus-based scholarship and affinity marketing tools - to the
higher education community. As of September 30, 2005, Collegiate
Funding Services had facilitated the origination of more than $21
billion in education loans and was servicing $12 billion in student
loans for more than 476,000 borrowers. For additional information,
visit http://www.cfsloans.com/ or call 1-888-423-7562.
Forward-Looking Statements Statements contained in this press
release which are not historical facts are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These "forward-looking statements" may include,
but are not limited to, analyses, and other information contained
herein relating to the proposed merger and anticipated synergies,
savings and financial and operating performance, including
estimates for growth, trends in each of the operations and
financial results, the markets for products, the future development
of business, and the contingencies and uncertainties of JPMorgan
Chase and Collegiate Funding Services to which JPMorgan Chase and
Collegiate Funding Services, respectively, may be subject, as well
as other statements including words such as "anticipate,"
"believe," "plan," "estimate," "expect," "intend," "will,"
"should," "may," and other similar expressions. Such statements are
made based upon management's current expectations and beliefs
concerning future events and their potential effects on the
company. Future events and their effects on JPMorgan Chase and
Collegiate Funding Services may not be those anticipated by
management. Actual results may differ materially from the results
anticipated in these forward-looking statements. For a discussion
of factors that could cause or contribute to such material
differences, investors are directed to the risks and uncertainties
discussed in JPMorgan Chase's most recent Annual Report on Form
10-K for the year ended December 31, 2004, and Collegiate Funding
Services' most recent Annual Report on Form 10-K for the year ended
December 31, 2004 and JPMorgan Chase's and Collegiate Funding
Services' quarterly reports on Form 10-Q and other documents filed
by JPMorgan Chase and Collegiate Funding Services with the
Securities and Exchange Commission ("SEC"). These risks and
uncertainties include, without limitation, the following: the
ability to promptly and effectively integrate the businesses of
JPMorgan Chase and Collegiate Funding Services; the reaction of
JPMorgan Chase's and Collegiate Funding Services' clients to the
merger and the ability to retain those clients; the ability to
retain key personnel; potential client conflicts; the ability to
achieve the anticipated strategic benefits of the proposed merger;
the diversion of management time on merger-related issues; the
performance of financial markets and interest rates; competitive
and business factors; new Department of Education, tax or other
government regulations; changes in the demand for educational
financing or in financing preferences of educational institutions,
students and their families; changes in the credit quality or
performance of the loans that CFS purchases, retains or
securitizes; changes in interest rates and in the securitization or
secondary markets for education loans; the failure to obtain
shareholder or regulatory approval for the merger, or adverse
regulatory conditions imposed in connection with governmental
approvals of the merger; and changes in general economic
conditions. Neither JPMorgan Chase nor Collegiate Funding Services
undertakes, and each specifically disclaims, any obligation to
update or revise any forward- looking information, whether as a
result of new information, future developments or otherwise.
Important Legal Information In connection with the proposed merger,
Collegiate Funding Services will file a proxy statement with the
SEC. Before making any voting decision, Collegiate Funding
Services' stockholders and investors are urged to read the proxy
statement regarding the merger and any other relevant documents
carefully in their entirety when they become available because they
will contain important information about the proposed merger. The
proxy statement and other documents will be available free of
charge at the SEC's Web site, http://www.sec.gov/. Stockholders and
investors in Collegiate Funding Services will also be able to
obtain the proxy statement and other documents free of charge by
directing their requests to Collegiate Funding Services, Office of
the Corporate Secretary, 1-800-762-6441, ext. 5329. Collegiate
Funding Services and its directors, executive officers and other
members of its management and employees may be deemed to be
participants in the solicitation of proxies in connection with the
proposed merger. Information regarding Collegiate Funding Services'
directors and executive officers is available in Collegiate Funding
Services' proxy statements and Annual Report on Form 10-K,
previously filed with the SEC. Additional information regarding the
interests of such potential participants will be included in the
proxy statement and the other relevant documents filed with the SEC
when they become available.
http://www.newscom.com/cgi-bin/prnh/20051215/NYTH056LOGO
http://www.newscom.com/cgi-bin/prnh/20050714/DCTH039LOGO
http://photoarchive.ap.org/ DATASOURCE: JPMorgan Chase Bank, N.A.;
Collegiate Funding Services, Inc. CONTACT: Media: Thomas Kelly of
Chase, +1-312-732-7007, ; Investor Relations: Julia Bates of JPM,
+1-212-270-7318, ; Media: Ann Collier, +1-800-762-6441, ext. 5259,
, or Investors Relations: Kevin Landgraver, +1-800-762-6441, ext.
5294, , both of CFS Web site: http://www.cfsloans.com/
http://www.jpmorganchase.com/
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