Parthenon Capital Partners has planted a stake in the auto finance sector with the $80 million purchase of White River Capital Inc., a financial services holding company that owns subprime lender Coastal Credit LLC.
The purchase marks the second time in the same number of months that a private equity firm has bought an auto lender. In September, Aquiline Capital Partners agreed to acquire First Investors for $100 million in cash. The transaction closed Oct. 31.
Parthenon Capital will pay $21.93 for each White River Capital share, in a deal valued at $79.5 million. White River’s stock has hovered in the low-$20-per-share range all year.
Founded in 1987, Coastal Credit originates mostly used-car loans to civilians and military personnel. The Virginia Beach-based lender operates 14 branch locations in a 27-state footprint. Parthenon expects to expand Coastal Credit nationally.
“After 10 years of effort in the industry and an intense three-year search for the right partnership in the subprime auto finance sector, we’re thrilled to partner with Bill McKnight and the Coastal Credit executive team to aggressively grow the company,” said Parthenon Managing Partner Brian Golson in a prepared statement.
Boston- and San Francisco-based Parthenon has $2.2 billion of capital under management.
