EverBank Financial Corp., Jacksonville, Fla., is buying Business Property Lending Inc. from GE Capital Real Estate North America for $2.51 billion cash.
Included in the purchase are $2.44 billion of performing commercial loans, the origination and servicing platforms, and the servicing rights on $3.1 billion of loans securitized by GE Capital. The senior management team as well as 108 employees will join EverBank after the deal is completed.
In a conference call, EverBank president and chief operating officer Blake Wilson called the deal a unique opportunity because it is a combination of a strategic transaction, which is financially attractive and has minimal risk for the bank.
During the downturn, he noted, GE curtailed BPL's origination activity because "of corporate priorities," but retained its infrastructure. In 2007, the last full year BPL was operating at normal capacity, it did $4.1 billion. Last year it did $117 million and this year it is on pace to do $317 million.
EverBank sees the clientele for BPL as small- and middle-market businesses with revenue of $5 million to $75 million who will need loans of $1 million to $20 million.
Since 1997, BPL did volume of $27 billion with cumulative lifetime losses of 151 basis points.
BPL has 14 offices, with several that overlap with EverBank. The deal accelerates its growth plans while at the same time diversifies balance sheet into high quality business property loans.
The loan portfolio is well diversified both among property type and location.
