Will Nicholas Financial Be the Next Takeover Target?
Nicholas Financial got a boost in its credit line last week, to $150 million from $140 million. The facility is backed by Bank of America, with participation from Wells Fargo, Capital One, First Horizon National, and the Bank of Montreal.
With the ink barely dry on the Exeter-Blackstone acquisition, and companies seeking access to the subprime market, might Nicholas ― one of the largest remaining independent auto finance companies ― be the next takeover target?
The new funding facility replaced a $140 million line of credit, and is set to expire Nov. 30, 2013.
Nicholas, established in 1985, has shown steady growth in the past few years, increasing originations to $36.5 million of loans in the quarter ended June 30, from $35.6 million in 2Q10 and $30.1 million in 2Q09. Its previous line of credit was increased in January 2010, from $115 million.
Here are some other stats for the Clearwater, Fla.-based subprime lender (2Q11 vs. 2Q10):
• Average finance receivables, net of unearned interest: $269.1 million vs. $138.8 million
• Average cost of borrowed funds: 4.18% vs. 5.69%
• Provision for credit losses as a percentage of average finance receivables, net of unearned interest: 0.12% vs. 2.68%
• Net chargeoff percentage: 3.62% vs. 4.59%
