- Acquired an established middle market, asset-based lender with a national origination franchise
- Purchase includes loan portfolio with credit commitments totaling approximately $164 million and funded loans of $73 million
- Talented team of industry veterans led by seasoned executives
- Added four new regional offices, bolstering existing national direct origination franchise
- Enhanced funding platform and lending capacity with a $225 million credit facility provided by DZ Bank
- Consistent with strategy to build franchise of specialized commercial lending businesses
- Expected to be accretive to earnings per share in 2011 with benefit of cost savings and accretion of discount
The business will serve as a foundation for NewStar to provide asset-based lending services to small and medium sized businesses on a national basis. The company will operate as NewStar Business Credit after a transition period and will remain headquartered in Dallas, Texas.NewStar Business Credit will be led by Michael Haddad, CORE's current CEO and a seasoned executive in the middle market asset-based lending industry, who has founded and built several successful asset-based lending businesses during his career. Prior to CORE, he co-founded Marquette Business Credit and served as Executive Vice President. "This acquisition is consistent with our strategy of building our franchise with specialized lending platforms that add to our value proposition for customers and leverage our core strengths in direct origination and credit management. This transaction also provides an attractive way to diversify our business mix and funding platform," said NewStar's Chairman and Chief Executive Officer Tim Conway. "The team at CORE Business Credit is among the best in the industry. They have an outstanding track record and will help reinforce our national origination franchise." "The transaction is expected to be accretive to earnings," added John Bray, NewStar's Chief Financial Officer. "We were able to complete thorough due diligence and re-underwrote each loan. The terms of the transaction were attractive to us with economic benefits expected to be derived from a combination of attractive asset yields, cost synergies and accretion of the purchase discount. As a result, we expect CORE to generate solid after-tax returns on equity in 2011." "We are enthusiastic about the opportunity to add our established asset-based lending platform to NewStar's national lending franchise," said Michael Haddad. "Credit availability continues to be a hurdle for small and mid-sized companies. As a NewStar Financial company, we can provide more businesses with the capital they need and add to NewStar's origination and product capabilities across the country."
About NewStar Financial, Inc.:NewStar Financial (Nasdaq:NEWS) is a specialized commercial finance company focused on meeting the complex financing needs of companies and private investors in the middle markets. The Company specializes in providing senior secured debt financing for the acquisition or recapitalization of mid-sized companies and commercial real estate. NewStar originates loans directly through a team of experienced, senior bankers organized around key industry and market segments. The Company targets 'hold' positions of up to $20 million and selectively underwrites or arranges larger transactions for syndication to other lenders. NewStar is headquartered in Boston MA and has regional offices in Darien CT and Chicago IL. The NewStar Financial, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4044 Forward-Looking Statements: This press release contains forward-looking statements, including statements regarding NewStar's expected return and planned growth for the asset-based lending business. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those results indicated in the forward-looking statements include uncertainties relating to future events that could affect CORE's credit performance and level of earning assets.
CONTACT: NewStar Financial, Inc. Robert K. Brown 617.848.2558 firstname.lastname@example.org