CHICAGO and NEW YORK, July 28,
2020 /PRNewswire/ -- Enova International (NYSE: ENVA) and
OnDeck® (NYSE: ONDK), today announced that they have entered into a
definitive agreement under which Enova will acquire all outstanding
shares of OnDeck in a cash and stock transaction valued at
approximately $90 million. The
implied price of $1.38 per OnDeck
share reflects a 43.6% premium to its 90-day volume weighted
average price and a 90.4% premium based on the closing price of
$0.73 per OnDeck share on
July 27, 2020.
This transaction brings together two complementary,
market-leading businesses combining world-class capabilities in
consumer and small business online lending. Enova and OnDeck are
both innovators that have helped revolutionize online lending,
using data and advanced analytics to simplify and expand access to
financial services for underserved borrowers, while providing an
unparalleled customer experience. Enova will add the OnDeck brand,
products and services to its existing industry-leading portfolio to
create a combined company with significant scale and diverse
product offerings in consumer and small business market segments
that banks and credit unions have difficulty serving. Together,
Enova and OnDeck had $4.7 billion in
originations in 2019 and have served approximately 7 million
customers.
"This strategic transaction, which brings together two FinTech
leaders, is a great opportunity for customers, employees and
shareholders of both companies," said David
Fisher, CEO of Enova. "Together, our companies will be
stronger because of the complementary strengths and synergies of
our businesses. Acquiring a premier online small business lender
and its ODX bank platform, and welcoming its innovative and
talented team to Enova, will increase our scale and resources,
providing us with opportunities to accelerate growth in our
increasingly diversified portfolio as we continue to execute on our
strategy to create long-term value for all of our
stakeholders."
Noah Breslow, OnDeck Chairman and
CEO said, "I am proud of the business we have built and the more
than $13 billion of financing we have
provided to underserved small businesses since our founding in
2006. Following an extensive review of our strategic options, we
believe this is the right path forward for our customers, employees
and shareholders. Joining forces with Enova, a highly-respected and
well-capitalized leader in online lending, and leveraging our
combined scale and strengths, provides the best opportunity for our
long-term success."
Expected Strategic and Financial Benefits
- Highly Complementary Portfolio of Leading Brands:
The combined company will have a portfolio of leading brands and
products, with the scale and resources to invest in and drive
innovation. Both companies are known for their data and advanced
analytics, having created highly predictive, proprietary credit
scoring systems for their respective markets.
- Enhanced Ability to Serve Changing Industry and Customer
Landscapes: Together, Enova and OnDeck will be well
positioned to further support small businesses and consumers in the
wake of the COVID-19 pandemic. Both are mission-driven companies
focused on empowering the growth and success of small businesses by
providing access to efficient and transparent capital and helping
hardworking people get access to fast, trustworthy credit.
- Increased Scale and Financial Strength: The
combination will create a leading online financial services company
with increased scale, more diversified revenues, stronger cash flow
potential, meaningful synergies and increased flexibility to drive
growth, profitability and shareholder value.
- Experienced Management and Strong, Innovative
Cultures: Enova and OnDeck share innovative and
customer-oriented cultures, led by experienced management teams who
are committed to creating a great place to work for team members.
Enova and its management also have a strong history of successfully
executing and integrating transactions.
- Significant Shareholder Value Creation
Opportunities: The transaction is anticipated by
Enova to result in approximately $50
million in annual cost synergies and approximately
$15 million in run-rate net revenue
synergies to be fully phased-in by year-end 2022. The transaction
is expected to be accretive in the first year post-closing and will
generate earnings per share accretion of more than 40% when
synergies are fully recognized. Shareholders of both companies will
further benefit from the opportunity for long-term growth and
upside through ownership in a stronger and more dynamic combined
company.
- Strong Balance Sheet and Access to Capital
Markets: On a pro forma basis, the combined company is
expected to have a well-capitalized balance sheet and
industry-leading profitability metrics. Enova has a strong funding
profile and proven ability to access capital markets to fund and
accelerate growth. As of March 31,
2020, on a pro forma basis the companies had combined gross
receivables of $2.4 billion, 61% of
which were small business assets and 39% consumer assets. For the
year ended December 31, 2019, on a
pro forma basis including synergies, Enova and OnDeck had estimated
combined gross revenue of $1.65
billion, adjusted EBITDA of $427
million and adjusted earnings of $215
million.
Transaction Details
The transaction is valued at approximately $90 million, of which $8
million will be paid in cash. Under the terms of the
agreement, OnDeck shareholders will receive $0.12 cents per share in cash and 0.092 shares of
Enova common stock for each share of OnDeck held.
Upon completion of the transaction, OnDeck shareholders will own
approximately 16.7% of the combined entity, with Enova shareholders
owning approximately 83.3%.
The transaction has been unanimously approved by the boards of
directors of both companies and is subject to OnDeck shareholder
approval and HSR approvals, along with customary closing
conditions. The transaction is expected to close this year.
Board and Management
Mr. David Fisher will continue to
lead the combined company. Mr. Noah
Breslow will join the company as Vice Chairman and serve on
the Enova management team.
Advisors
Jefferies LLC is acting as exclusive financial advisor to Enova,
and Vedder Price P.C. is acting as
its legal advisor. Evercore is acting as financial advisor to
OnDeck and Kirkland & Ellis LLP is acting as its legal
advisor.
Conference Call and Webcast Information
The transaction will be discussed on Enova's second quarter 2020
earnings webcast and conference call at 4
p.m. Central Time / 5 p.m. Eastern
Time today. The live webcast of the call can be accessed at
the Enova Investor Relations website at http://ir.enova.com, along
with the company's earnings press release and supplemental
financial information. The U.S. dial-in for the call is
1-855-560-2575 (1-412-542-4161 for non-U.S. callers). Please ask to
be joined to the Enova call. A replay of the conference call will
be available until August 4, 2020, at
10:59 p.m. Central Time /
11:59 p.m. Eastern Time, while an
archived version of the webcast will be available on the Enova
Investor Relations website for 90 days. The U.S. dial-in for the
conference call replay is 1-877-344-7529 (1-412-317-0088). The
replay access code is 10146419.
Additional information about the transaction can also be found
at ir.enova.com and investors.ondeck.com.
About Enova
Enova (NYSE: ENVA) is a leading provider of online financial
services to non-prime consumers and small businesses, providing
access to credit powered by its advanced analytics, innovative
technology, and world-class online platform and services. Enova has
provided nearly 7 million customers around the globe with access to
more than $20 billion in loans and
financing. The financial technology company has a portfolio of
trusted brands serving consumers, including CashNetUSA®, NetCredit®
and Simplic®; two brands serving small businesses, Headway Capital®
and The Business Backer®; and offers online lending platform
services to lenders. Through its Enova Decisions™ brand, it also
delivers on-demand decision-making technology and real-time
predictive analytics services to clients. You can learn more about
the company and its brands at www.enova.com.
About OnDeck
OnDeck (NYSE: ONDK) is the proven leader in transparent and
responsible online lending to small business. Founded in 2006, the
company pioneered the use of data analytics and digital technology
to make real-time lending decisions and deliver capital rapidly to
small businesses online. Today, OnDeck offers a wide range of term
loans and lines of credit customized for the needs of small
business owners. The company also offers bank clients a
comprehensive technology and services platform that facilitates
online lending to small business customers through ODX, a wholly
owned subsidiary. OnDeck has provided over $13 billion in loans to customers in 700
different industries across the United
States, Canada and
Australia. The company has an A+
rating with the Better Business Bureau and is rated 5 stars by
Trustpilot. For more information, visit www.ondeck.com.
Forward-looking Statements
This release contains forward-looking statements within the
meaning of and subject to the safe harbor created by, Section 21E
of the Securities Exchange Act of 1934, as amended, about the
business, strategy, financial condition and prospects of Enova and
OnDeck, their expectations relating to the proposed transaction and
their future financial condition and performance, including
estimated synergies. Statements that are not historical facts,
including statements about Enova's and OnDeck's managements'
beliefs and expectations, are forward-looking statements.
Words such as "believes", "anticipates", "estimates", "expects",
"intends", "aims", "potential", "will", "would", "could",
"considered", "likely", "estimate" and variations of these words
and similar future or conditional expressions are intended to
identify forward-looking statements but are not the exclusive means
of identifying such statements. These forward-looking
statements give current expectations or forecasts of future events
and reflect the views and assumptions of Enova's and OnDeck's
respective senior management as of the date of this release and are
not guarantees of future performance. The actual results of Enova
and OnDeck could differ materially from those indicated by such
forward-looking statements because of a number of factors affecting
Enova's and OnDeck's respective businesses and risks associated
with the successful execution and integration of the proposed
transaction and the performance of their businesses following such
transaction. These factors include, among others, the
occurrence of an event, change or other circumstance that could
give rise to the termination of the merger agreement; the ability
to complete the proposed transaction on the anticipated terms and
timing and the possibility that any of the anticipated benefits of
the proposed transaction will not be realized or will not be
realized within the expected time period; the ability of Enova to
integrate the OnDeck business successfully and to achieve
anticipated synergies; potential litigation relating to the
proposed transaction; the risk that disruptions from the proposed
transaction will harm Enova's and OnDeck's business; continued
availability of capital and financing on favorable terms or at all;
legislative, regulatory and economic developments; potential
business uncertainty, including changes to existing business
relationships, as a result of the announcement of the transaction
and during the pendency of the acquisition that could affect
Enova's and/or OnDeck's financial performance; dilution caused by
Enova's issuance of additional shares of its common stock in
connection with the proposed transaction; the possibility that the
transaction may be more expensive to complete than anticipated,
including as a result of unexpected factors or events; and such
other risks and uncertainties detailed in Enova's and OnDeck's
periodic public filings with the SEC, including but not limited to
those discussed under "Risk Factors" in Enova's Form 10-K for the
fiscal year ended December 31, 2019
and in its Form 10-Q for the quarterly period ended March 31, 2020; in OnDeck's Form 10-K for the
fiscal year ended December 31, 2019
and in its Form 10-Q for the quarterly period ended March 31, 2020; in Enova's and OnDeck's
subsequent filings with the SEC and in other investor
communications of Enova and OnDeck from time to time. These risks
and uncertainties are beyond the ability of either Enova or OnDeck
to control, and, in many cases, neither Enova nor OnDeck can
predict all of the risks and uncertainties that could cause actual
results to differ materially from those indicated by the
forward-looking statements. Enova and OnDeck caution you not to put
undue reliance on these forward-looking statements. Each of Enova
and OnDeck disclaims any intention or obligation to update or
revise any forward-looking statements after the date of this
release.
Non-GAAP Financial Information
In addition to the financial information prepared in conformity
with generally accepted accounting principles in the United States ("GAAP"), this release
includes certain non-GAAP financial measures. Management uses
these non-GAAP financial measures for internal managerial purposes
and believes that their presentation is meaningful and useful in
understanding the activities and business metrics of Enova's and
OnDeck's respective operations. Management believes that
these non-GAAP financial measures reflect an additional way of
viewing aspects of Enova's and OnDeck's respective businesses that,
when viewed with Enova's and OnDeck's respective GAAP results,
provides a more complete understanding of factors and trends
affecting Enova's and OnDeck's respective businesses.
Management provides such non-GAAP financial information for
informational purposes and to enhance understanding of Enova's and
OnDeck's GAAP consolidated financial statements. Readers
should consider the information in addition to, but not instead of,
Enova's and OnDeck's financial statements prepared in accordance
with GAAP. This non-GAAP financial information may be
determined or calculated differently by other companies, limiting
the usefulness of those measures for comparative purposes.
Additional Information and Where To Find It
This document relates to a proposed transaction between Enova
International, Inc. ("Enova") and On Deck Capital, Inc. ("OnDeck")
that will become the subject of a registration statement on Form
S-4, including a proxy statement/prospectus forming a part thereof,
to be filed with the Securities and Exchange Commission
("SEC"). This document is not a substitute for the
registration statement and proxy statement/prospectus that Enova
and OnDeck expect to file with the SEC or any other document that
Enova or OnDeck may file with the SEC or send to stockholders of
OnDeck in connection with the proposed transaction. BEFORE
MAKING ANY VOTING DECISION, ONDECK INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT
WILL BE FILED BY ENOVA OR ONDECK WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors and security holders will be able to
obtain free copies of the registration statement and the proxy
statement/prospectus, when available, and other relevant documents
filed or that will be filed by Enova and OnDeck with the SEC
through the website maintained by the SEC at www.sec.gov.
Copies of the registration statement and other relevant documents
filed by Enova with the SEC will be available free of charge on its
internet website at www.enova.com. Copies of the proxy
statement/prospectus and other relevant documents filed by OnDeck
with the SEC will be available free of charge on Enova's internet
website at www.enova.com.
No Offer or Solicitation
This document does not constitute an offer to sell, or an
invitation to subscribe for, purchase or exchange, any securities
or the solicitation of any vote or approval in any jurisdiction,
nor shall there be any sale, issuance, exchange or transfer of the
securities referred to in this announcement in any jurisdiction in
contravention of applicable law.
Participants in the Solicitation
Enova, OnDeck and their respective directors and executive
officers may be considered participants in the solicitation of
proxies from stockholders of OnDeck in connection with the proposed
transaction. Information about the directors and executive
officers of OnDeck can be found in the proxy statement for its 2020
annual meeting of stockholders, which was filed with the SEC on
March 18, 2020, as supplemented. Information about the
directors and executive officers of Enova can be found in the proxy
statement for its 2020 annual meeting of shareholders, which was
filed with the SEC on April 2, 2020. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
OnDeck, the OnDeck logo,
OnDeck Score, OnDeck Marketplace and
ODX are trademarks of On Deck Capital, Inc. or its
subsidiaries.
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SOURCE Enova International, Inc.