Sovereign Acquires the Network Company
PHILADELPHIA--(BUSINESS WIRE)--June 24, 1999--Sovereign Bancorp, Inc. ("Sovereign") (NASDAQ/NMS:SVRN), parent company of Sovereign Bank, announced today the acquisition of The Network Companies, ("Network") a privately held specialty leasing company headquartered in Commack, New York.
Network provides financing for equipment and specialty vehicles to groups throughout the United States, with transactions ranging from $15 thousand to $250 thousand. The acquisition will be accounted for as a purchase for reporting purposes and become a division of Sovereign Bank. Network has total assets of approximately $50 million.
The financial terms are not disclosed. The transaction is expected to be immediately accretive to Sovereign's 1999 earnings per share and is expected to add approximately one cent ($0.01) per share in 2000.
Network's unique products provide funding for the purchase or lease of equipment and specialty vehicles plus other specialty products for other businesses. Network currently has an alliance with the National American Automobile Association ("AAA") in which Network is the endorsed lender to assist local AAA affiliated businesses in financing the acquisition of tow trucks.
Sovereign will retain the current staff of 30 experienced employees. The top three lenders have over sixty aggregate years of industry/industry related experience.
"We are very excited to enter into this agreement with Network. With Network's expertise in capital equipment financing, Sovereign will now have access to this burgeoning segment of the commercial finance business. This acquisition will enable Sovereign to offer a complete array of equipment financing options to new and existing customers," stated Jay S. Sidhu, Sovereign's President and CEO. "One of the most attractive aspects of this merger is that Network provides Sovereign with a national distribution channel to capture large vendor/dealer or affinity financing programs, similar to the AAA relationship with Network. We see some very exciting marketing opportunities with AAA as well," Sidhu continued.
According to Peter Ferrara, Sr., President of Network and President of the new division of Sovereign, "If I had to identify why we choose Sovereign over other possible candidates, it is because Sovereign provides us with the necessary capital, technology and support service expertise that we need to achieve our strategic growth plan. There is a common entrepreneurial spirit and vision for the opportunities that this type of deal brings. I am very excited to be joining Sovereign's team." |
