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Investment Banking and
Strategic Business Development
Capital One Financial Purchase of PeopleFirst Inc.
Acquisition Summary
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Target Information |
| Target: |
PeopleFirst Inc.
Type of Company: Motor Vehicle Loans |
| City: |
San Diego |
State: CA
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| Financial Data As Of: |
N/A |
Assets: N/A |
Book Value: $8 million |
| Target’s Business: |
PeopleFirst,
founded in 1995, is the nation’s largest online motor vehicle lender,
originating and servicing consumer auto and motorcycle loans, primarily
via the internet. People First, with 270 employees, offers consumers the
flexibility to finance their purchase of a new or used car or motorcycle
at virtually any dealership in the country up to their pre-approved loan
amount without having to renegotiate the terms. The company also
provides financing for lease buyouts, refinances of existing loans, and
the purchase of vehicles from private individuals in 48 states plus the
District of Columbia. The company has provided nearly $2 billion worth
of motor vehicle financing since inception. Investors include: AMEX, JP
Morgan and Madison Dearborn |
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Acquirer Information |
| Acquirer: |
Capital One
Financial (COF) Type of Company: Diversified Financial Services |
| City: |
Falls Church |
State: VA |
| Financial Data As Of: |
06/30/01 |
Assets: $22
billion |
Book Value: $2.7 billion
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| Acquirer’s Business |
Capital One
Financial Corporation is a holding company whose subsidiaries provide a
variety of products and services to consumers using its proprietary
information-based strategy. The Company's principal subsidiary, Capital
One Bank, a limited-purpose credit card bank, offers credit card
products. Capital One, F.S.B., a federally chartered savings bank,
offers consumer lending and deposit products. Capital One Services Inc.,
another subsidiary of the Company, provides various operating,
administrative and other services to the Company and its subsidiaries.
Capital One's business consists of both lending and non-lending
activities. Its lending activities consist primarily of credit card
products, but also include other consumer lending activities, such as
unsecured installment lending and automobile financing. Its non-lending
business activities consist primarily of its retail deposit-taking
business and various non-lending new business initiatives. |
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Transaction Information |
| Status: |
Pending |
| Announcement
Date: |
09/21/01 |
Accounting:
Purchase |
| Completion Date: |
4th
Q. 2001 |
Consideration:
Stock |
| Deal Value: |
$174 million,
3.7 million shares of Capital One, 21.7x book value; $166 million of
goodwill was paid |
| Comments: |
The purchase
will make Capital One one of the nation’s largest providers of
direct-to-consumer auto loans. Shareholders of PeopleFirst will receive
3.7 million shares of Capital One common stock. This acquisition extends
Capital One’s auto finance strategy to superprime consumers and those
directly seeking financing online. PeopleFirst will become a wholly
owned subsidiary and the current senior team at PeopleFirst will
continue to manage its operations. |
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