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Investment Banking and
Strategic Business Development
Hudson United Bancorp Purchase of Flatiron Credit Company,
Inc.
Acquisition Summary
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Target Information |
| Target: |
Flatiron Credit
Company, Inc. Type of Company: Insurance Premium Finance |
| City: |
Denver |
State: CO |
| Financial Data As Of: |
N/A |
A/R: $275
million |
Book Value: $36.6 million |
| Target’s Business: |
Flatiron Credit
Company was formed in April of 1995 to be the premier funding partner to
insurance agents, general agents and insurance companies.
Flatiron's founding partners and original sponsorship came from Newman
and Associates, Inc., a 20+ year specialty investment banking firm later
acquired by GMAC. Flatiron's majority owner is E. M. Warburg
Pincus & Co., a major private equity company based in New York. Flatiron
is the seventh largest insurance premium finance company in the nation.
The majority of loans outstanding in Flatiron's portfolio are made to
small business customers located throughout the nation; are in amounts
between $20,000 and $500,000; are secured by an ability to cancel the
insurance policy upon a payment default and obtain refund of the
remaining unearned premiums from the insurance company; have maturities
of less than one year; are fixed rate; and are originated at yields that
are higher than the Prime Rate. In August of 1999, Flatiron acquired
Westchester Premium Acceptance Corp from the St. Paul Companies.
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Acquirer Information |
| Acquirer: |
Hudson United
Bancorp ("HU") Type of Company: Multi-State Bank Holding Company |
| City: |
Malwah |
State: NJ |
| Financial Data As Of: |
06/30/03 |
Assets: $7.9
billion |
Book Value: $454 million
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| Acquirer’s Business |
Hudson United
Bancorp is the bank holding company for Hudson United Bank (the Bank).
The Company directly owns the Bank, as well as four additional
subsidiaries, which are HUBCO Capital Trust I, HUBCO Capital Trust II,
JBI Capital Trust I and Jefferson Delaware, Inc. The Company is also the
indirect owner, through the Bank, of nine subsidiaries. The Bank
operates over 205 branches located throughout the state of New Jersey;
the Hudson Valley area of New York State; New York City; southern
Connecticut in the areas between Greenwich and Hartford, and in
Philadelphia and surrounding areas in Pennsylvania. |
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Transaction Information |
| Status: |
Pending |
| Announcement
Date: |
07/25/03 |
Accounting:
Purchase |
| Completion Date: |
4th
Qtr. 2003 |
Consideration:
Cash |
| Deal Value: |
$40 million,
subject to book value at deal closing and potential earn-out payments
based on net income over next two years |
| Comments: |
The purchase
price (excluding any potential earn-out payments) represents a $3.4
million premium to Flatiron's projected book value of $36.6 million on
the closing date, which is a 9% premium to projected book value. The
premium is also approximately 1% of Flatiron's loans, which are
projected to be greater than $275 million on the closing date. Flatiron
has approximately $8.0 million in pretax income, which makes the
purchase price 5x pretax earnings. Credit Suisse First Boston was the
financial advisor to Flatiron; UBS Investment Bank was the financial
advisor to the Hudson United. |
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