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Wells Fargo to Acquire GE Capital’s Vendor Finance and CDF Businesses

October 14, 2015, 07:10 AM
Filed Under: Mergers & Acquisitions

Wells Fargo & Company announced that it has signed an agreement to purchase GE Capital’s Vendor Finance and Commercial Distribution 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.”

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
  • 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

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
  • 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

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
  • 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

Wells Fargo Securities served as financial advisor and Mayer Brown served as legal advisor. Mayer Brown's legal team was led by Elizabeth Raymond. The team included partners Nina Flax, Ger O'Donnell, Rich Assmus, Rebecca Eisner, Debora Hoffman, Jeffrey Taft, Lee Morlock, Brian Newhouse, John Clark, Kate Ball-Dodd, Mark Compton as well as Mayer Brown associates Joe Hable and Joseph Pennell.

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