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Wintrust Financial to Buy $581MM in Loans from GE Capital Franchise Finance

July 01, 2016, 07:12 AM
Filed Under: Franchise Finance

Wintrust Financial Corporation announced that the franchise finance group (“Wintrust Franchise Finance”) of its subsidiary Lake Forest Bank and Trust Company has signed a definitive agreement  to acquire approximately $581 million in performing loans and related relationships from an affiliate of GE Capital Franchise Finance.  The loans are to franchise operators (primarily quick service restaurant concepts) in the Midwest and in the Western portion of the United States.

Wintrust Franchise Finance exclusively serves the needs of franchise operators and franchisors.  It has been in existence for 15 years and currently serves more than 100 clients nationwide.

Edward J. Wehmer, President and CEO of Wintrust said, “This transaction represents the continued strategic expansion of our franchise finance business.  It is a business we know well and the loans acquired are to firms that, in most cases, are well known to our experienced staff.  We look forward to continuing to serve the franchise finance market.”

GE announced a plan in April 2015 to focus on its high-value industrial businesses and sell most GE Capital assets not linked to GE’s core industrial businesses. GE Capital Franchise Finance has been a top provider of credit to franchise operators and GE will sell its franchise finance assets to a select group of financial services providers with experience in the area.

Closing of the transaction, which is subject to customary closing conditions, is expected to occur in the third quarter of 2016.  The dollar amount of loans acquired may increase or decrease based on activity between the announcement and the closing.  The transaction is expected to be slightly accretive to Wintrust’s 2016 earnings per share and accretive in 2017.

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