Wells Fargo & Company recently announced that it has signed an agreement to purchase GE Capital’s Commercial Distribution Finance and Vendor 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 based in the U.S. and Canada. 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.”
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.
Following is an overview of GE Capital’s CDF business:
* Total assets of approximately $13 billion (as of June 30, 2015)
* Approximately 2,000 original equipment manufacturers (OEMs) and 40,000 dealers
* 80 percent 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
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.
An overview of GE Capital’s Vendor Finance business:
* Total assets of approximately $9 billion (as of June 30, 2015)
* 40-plus equipment OEMs; 3,300 dealers; and more than 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
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.
An overview of GE Capital’s Corporate Finance business:
* Total assets of approximately $10 billion (as of June 30, 2015)
* 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
For more information, visit www.wellsfargo.com.