Capital One Financial Corporation is to acquire Onyx Acceptance Corporation for $US191 million in an all-cash transaction.
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The acquisition will combine Capital One Auto Finance (COAF), a vehicle finance provider through dealers and direct to consumers, with Onyx and significantly expands COAF’s dealer relationships, deepens its coast-to-coast market penetration, and enhances its product line, especially among ‘prime’ borrowers (i.e. consumers who achieve top scores in dealers’ credit checks).
For the year ended June 30, 2004, Onyx originated $2.5 billion in vehicle loans through more than 12,000 dealers. Ranked by annual originations, the acquisition will create the second largest independent vehicle lender in the United States.
“Auto finance is an important component of our diversification strategy and contributor to our bottom line,” said Capital One chairman and CEO Richard Fairbank.
Onyx’s senior management, headed by president and CEO John Hall “will play an important role” in COAF’s business, according to the two companies, and will report to Capital One’s vehicle finance chief David Lawson.
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By GlobalDataUnder takeover agreement, Onyx shareholders will receive cash of $28 per share and the deal is expected to be completed early in the first quarter of 2005.
