2021: The year of M&A in auto finance

If 2021 had a catchphrase, it might as well be “The Year of Mergers and Acquisitions.” Original equipment manufacturers and digital retailers acquired nonprime financiers, private equity firms entered the auto finance space, and fintechs acquired digital retailing platforms as companies look to stay one step ahead of the curve in a dynamic market.

Here are Auto Finance News’ top 5 M&A stories from 2021.

Stellantis acquires First Investors in move to establish captive finance business

Stellantis might be the newest OEM on the block, but it was also the only OEM without a captive finance arm. That streak was broken when the Amsterdam-based manufacturer — which was born when Fiat-Chrysler Automobiles merged with PSA Groupe earlier this year — acquired subprime lender First Investors Financial Services to build its captive finance business. There’s plenty of room for growth for the newly minted captive in the years ahead, too.

Vroom to acquire United Auto Credit for $300M

Not long after Stellantis announced its intent to acquire First Investors, online used-car retailer Vroom took its first steps into the captive finance space with its acquisition of United Auto Credit Corp. for $300 million. The acquisition will allow Vroom to offer competitive financing to consumers deeper down the credit spectrum.

Exeter Finance to be acquired by private equity firm Warburg Pincus

Private equity firm Warburg Pincus acquired Dallas-based Exeter Finance in July from funds managed by BlackRock Capital. New York-based Warburg Pincus, now owns over 90% of the subprime lender, is an active investor in the auto finance space with investments in Santander Consumer USA and defi Solutions, among others.

Santander Consumer USA agrees to Banco Santander $2.5B acquisition deal

Spain-based Banco Santander, through its U.S.-based holding company Santander Holdings, set out this year to acquire all outstanding common shares of its full spectrum lender Santander Consumer USA, of which it already owned 80%. Dallas based-SCUSA’s board in August agreed to the deal, which is expected to close by Q4, but Banco Santander has since twice extended its tender offer to acquire outstanding common shares of the auto lender.

CDK Global acquires digital auto sales platform Roadster

Automotive fintech CDK Global stepped into the digital retailing space in June when it acquired Roadster, a digital sales platform. The integration of CDK and Roadster’s capabilities will enable franchise auto dealers to sell new and used vehicles completely online.