Issue link: https://read.dmtmag.com/i/592917
FINANCIAL Acquisition finds new home for floorplan financer Wells Fargo & Company (NYSE: WFC) announced in October that it has signed an agreement to purchase GE Capital's Commer- cial Distribution Finance and Vendor Finance platforms as well as a portion of its Corporate Finance business. The acquisition includes total assets of approximately $32 billion as well as busi- nesses employing approximately 3,000 team members. The loan and lease portfolios are roughly 90 percent U.S.- and Canada-based. The transaction is expected to close in the first quarter of 2016. Other terms of the trans- action were not disclosed. "This acquisition is an outstanding oppor- tunity for Wells Fargo to deepen relationships and strengthen our presence in key com- mercial lending markets," said Tim Sloan, head of Wells Fargo Wholesale Banking. "GE Capital's businesses are industry leaders with proven business models and capabilities backed by exceptionally talented and experi- enced teams. These advantages, in addition to portfolios that are diversified geographi- cally and by industry, will allow Wells Fargo to continue to grow our business in order to better serve the needs of new and existing Wholesale Banking customers." GE Capital's Commercial Distribution Finance (CDF) business is a market leader in providing customized inventory financing to fund the flow of finished durable goods from manufacturers to dealers. Through industry expertise and integrated technologies, CDF helps manufacturers and dealers improve cash flow, reduce risk and grow sales. CDF's inven- tory finance products and deep customer rela- tionships will greatly complement and expand existing asset-based lending product offerings in Wells Fargo's Capital Finance division. Here's a look at GE Capital's CDF business: Total assets of approximately $13 billion Approximately 2,000 Original Equipment Manufacturers (OEMs) and 40,000 dealers 80 percent of customers in the U.S. and Canada Key industry sectors: motorsports, marine, recreational vehicle, outdoor products, elec- tronics and appliances, and technology $49.9 billion in volume in 2014 VENDOR FINANCE GE Capital's Vendor Finance business pro- vides vendor and dealer financing programs for manufacturers and dealers of all sizes, and their customers, across the U.S. and Canada, from Fortune 500 companies looking to offer private label financing to independent opera- tions looking to manage cash flow. The busi- ness drives vendor sales growth by supporting dealers with inventory financing and by provid- ing leases and loans to commercial end-user customers. As a leading provider of technology- enabled white label captive program and chan- nel financing solutions, GE's Capital's Vendor Finance business will significantly expand Wells Fargo's current capabilities within its Equipment Finance business. Here's a look at the GE Capital Vendor Finance business: Total assets of approximately $9 billion 40-plus Equipment OEMs, 3,300 dealers and more than 160,000 end-user borrowers Operates in the U.S. and Canada Key industry sectors: office imaging, con- struction and technology/industrials $6.7 billion in originations in 2014 CORPORATE FINANCE GE Capital's Corporate Finance business (also known as Direct Lending and Leasing) provides senior secured asset-based loans as well as equipment leases and loans to middle-market customers. Wells Fargo is purchasing a portion of the business, which will ultimately be integrated into its existing Capital Finance and Equipment Finance businesses. Here's a look at the GE Capital Corporate Finance business: Total assets of approximately $10 billion 200 lending customers and 3,400 leasing customers Operates in the U.S. and Canada Key industry sectors: food and beverage, retail, metals, forestry, oil and gas, marine, automotive, aerospace and construction. PSB 16 • November 9, 2015 • Powersports Business www.PowersportsBusiness.com Wells Fargo to acquire GE Capital Commercial Distribution Finance STOCK MARKET WATCH DEALER FINANCIAL SNAPSHOT SEPTEMBER 2015 CDK Global Recreation dealerships' Same Store Sales were up 7 percent overall in September. The West, South and Northeast experienced increases in each of the four categories. The South had the largest increase overall, up 9.4 percent, with a 6.4 percent increase in service. The South was also up the most in major units, with a 12.1 percent increase, followed by the Northeast, which was up 11.9 percent in major units. PARTS SALES Parts saw 830 dealers were up, while 673 were down. SERVICE SALES Nationwide, 881 dealers were up in service, and 566 down. MAJOR UNIT SALES In major unit sales, 795 dealers were up, while 573 were down. NORTHWEST -2.6% Parts Department 7.0% Service Department 2.1% Major Units 1.7% Overall MIDWEST -1.8% Parts Department 5.8% Service Department 5.0% Major Units 4.4% Overall NORTHEAST 0.5% Parts Department 4.6% Service Department 11.9% Major Units 8.9% Overall SOUTH 3.7% Parts Department 6.4% Service Department 12.1% Major Units 9.4% Overall WEST 5.0% Parts Department 9.2% Service Department 6.1% Major Units 6.0% Overall UNITED STATES 1.7% Parts Department 6.7% Service Department 8.5% Major Units 7.0% Overall Stock Price Percent Company Ticker 10/16/15 Change General Electric Co. GE $28.98 16.2% Universal Technical Institute UTI $4.90 15.8% Intl. Speedway Corp. Cl. A ISCA $35.82 10.4% Cooper Tire & Rubber CTB $42.41 6.9% Bridgestone Corp. ADR BRDCY $18.21 6.5% Deere & Company DE $76.00 -4.1% CDK Global CDK $49.45 -4.1% Polaris Industries, Inc. PII $122.16 -4.5% Carlisle Companies CSL $91.58 -7.6% ArvinMeritor ARM $10.75 -13.5% POWERSPORTS BUSINESS WINNERS AND LOSERS MARKET WATCH Change 10/16/15 from 9/11 % Change Powersports Business Index 287.762 -1.03 -0.36% Dow Jones Index 149.742 6.81 4.76% S&P 500 Index 138.377 4.90 3.67% Source: Wells Fargo Securities LLC 50 100 150 200 250 300 350 400 11/7/14 12/5/14 1/2/15 1/23/15 2/20/15 3/13/15 4/10/15 5/1/15 5/22/15 6/19/15 7/24/15 8/14/15 9/11/15 10/16/15 PSB INDEX VALUE DOW JONES INDEXED S&P 500 INDEXED STOCK MARKET ACTIVITY FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: cdkrecreation.com/dataservices *The Powersports Business Index has been adjusted to reflect the addition of CDK Global (CDK) on 12/5/14.