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Investment Banking and
Strategic Business Development
Citigroup Purchase of Washington
Mutual Finance Corp.
Acquisition Summary
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Target Information |
| Target: |
Washington
Mutual Finance Corp. |
| City: |
Tampa |
State: FL |
| Type of Company: |
Consumer Finance
Company |
| Financial Data As Of: |
09/30/03 (LTM) |
Net Receivables:
$3.8 B Book Value: $567 mm |
Revenue: $581.9 mm Est. Net
Inc: $85 mm |
| Target’s Business: |
Washington Mutual Finance Corporation ("WMF"),
incorporated in Delaware in 1986, as Aristar, Inc., is a holding company
whose subsidiaries are engaged in the consumer financial services
business. WAMU obtained Aristar in its acquisition of Great Western.
Lending products include real estate secured, consumer installment loans
and retail sales finance contracts with an average yielding portfolio of
15.5%. WMF is an indirect, wholly-owned subsidiary of Washington Mutual,
Inc. WMF's operations consists principally of a network of 409
branch offices located in 25 states, primarily in the southeast,
southwest and California. These offices operate under
the name "Washington Mutual Finance". |
|
Acquirer Information |
| Acquirer Name: |
Citigroup |
| City: |
New York |
State: NY |
| Type of Company: |
Diversified
Global Financial Services Holding Company |
| Financial Data As Of: |
09/30/03 (LTM) |
Assets: $1.2 T
Book Value: $95.3 B |
Revenue: $75.1 B Net Income:
$13.7 B |
| Acquirer’s Business: |
Citigroup Inc. provides a broad range of financial
services to consumer and corporate customers with some 200 million
customer accounts in over 100 countries and territories. Citigroup was
incorporated in 1988 under the laws of the State of Delaware. The
Company's activities are conducted through the Global Consumer, Global
Corporate and Investment Bank (GCIB), Private Client Services, Global
Investment Management (GIM) and Proprietary Investment Activities
business segments. Major brand names include Citibank, CitiFinancial,
Primerica, Smith Barney, Banamex, and Travelers Life. |
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Transaction Information |
| Status: |
Pending |
| Announcement
Date: |
Nov. 2003 |
Accounting:
Purchase |
| Completion Date: |
First Qtr. 2004 |
Consideration:
Cash |
| Deal Value: |
$1.25 billion |
| Multiples: |
Price/Book: 2.2
x Price/ Est. 2003 Earnings: 14.5x |
| Comments: |
The era of the
"transformational merger" is over, Charles O. Prince, Citigroup's chief
executive officer, has said. "You're going to see more small deals,"
said Mr. Prince, who took over as chief executive on Oct. 1. "Small is
relative. For us, small can be pretty big." Washington Mutual Finance
has more than 2,300 employees and had assets of about $4 billion at the
end of September. The acquisition will boost Citigroup’s distribution
network by giving it access to roughly 65 ‘entirely new’ markets and add
over 90 new branches in key states like Texas, and California. The deal
underscores the rapid expansion of Citigroup’s vast consumer franchise,
which includes everything from credit cards to mortgage loans.
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