NEW YORK – Popular Inc. (BPOP), the parent of Banco Popular, on Wednesday said it agreed to buy online consumer lender E-Loan Inc. (EELN) for about $300 million in cash, expanding its U.S. lending business.
E-Loan shareholders will receive $4.25 per share, a 37.5 percent premium over its Tuesday closing price. The transaction is expected to close in the fourth quarter.
San Juan-based Popular, which is also Puerto Rico's largest bank, said the purchase will add to its non-prime and warehouse lending businesses, and significantly enhance its technology platform.
The acquisition is Popular's largest since it bought southern California's Quaker City Bancorp Inc. (search) for about $345 million last August.
"We are impressed with what E-Loan has built," said Richard Carrion, Popular's chief executive, in a statement. "We believe we can add financial strength and new products to further enhance it."
Pleasanton, Calif.-based E-Loan originated more than $5 billion of mortgage, home equity and auto loans in 2004. In January, it joined other lenders in agreeing to provide financing for cars bought by customers of online auctioneer eBay Inc.. E-Loan reported first-quarter net income of $2.2 million, or 3 cents per share, on revenue of $38 million.
E-Loan will keep its brand identity and become a unit of Popular Financial Holdings Inc. (search) Chief Executive Mark Lefanowicz will remain president, and the company will keep substantially all of its employees.
Both companies' boards of directors unanimously approved the transaction.
Popular has $46 billion of assets. It operates more than 135 branches in California, Florida, Illinois, New Jersey, New York and Texas, mainly in areas with big Hispanic populations, and 130 Popular Cash Express stores. It has more than 280 branches and offices in Puerto Rico.
J.P. Morgan and the law firm Wachtell, Lipton, Rosen & Katz advised E-Loan on the transaction, while Sullivan & Cromwell was legal counsel to Popular.
E-Loan shares rose $1.01, or 32.7 percent, to $4.10, while Popular shares fell 14 cents to $26.18.
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