Auto Lending News Reports:
In what appears to be the first acquisition in the auto finance space in quite some time, payday lender Dollar Financial Corp. agreed yesterday to buy Dealers’ Financial Services LLC for $118 million.
Lexington, Ky.-based DFS is an auto-loan facilitator for U.S. military personnel. As part of its MILES Program, DFS helps active duty military service members secure autos from a network of 545 franchised and independent auto dealerships. U.S. Bank underwrites the loans and maintains the portfolio.
DFS generates revenue from loan-application fees, warranty and GAP insurance commissions, and an interest rate spread between the bank’s rate and what the borrower pays. Since its founding in 1996, DFS has facilitated vehicle purchases for 75,000 military personnel.
Meanwhile, Berwyn, Pa.-based Dollar is a payday lender with 1,200 stores in the U.S., Canada, the U.K., Ireland, and Poland.
Here’s a comment from Jeff Weiss, Dollar’s chairman and CEO, about the acquisition: "We are very excited about the acquisition of this well-established business and its unique operating model, which provides the borrowers a competitive lending rate from a well known national bank, in addition to a number of consumer protection mechanisms. We intend to operate DFS as a standalone business unit of Dollar, in order to focus on leveraging the existing dealership network and lending platform to other customer segments through a number of proprietary strategic growth initiatives. We are pleased to welcome the entire management team of DFS, who along with their proven business model and strong dealership network, are well positioned to enhance DFS’s share of this growing market. This acquisition extends our multi-country, multi-product, and multi-channel business model, and is consistent with our strategy to pursue additional diversified investment opportunities to increase shareholder value."
The deal is slated to close in early December.
Provided by the Auto News RSS Feed: A $118 Million Ray of Hope
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