Enova International acquires struggling lender OnDeck in $90m deal
US alternative financing firm OnDeck has been snapped by Enova International in a $90 million deal.
Enova is acquiring all outstanding shares in a cash and stock sale. The figure is a steep knockdown considering OnDeck’s IPO valuation of $1.5 billion.
On the first day it traded, OnDeck shares rose as high as $27 dollars. Enova is paying a 90% premium on OnDeck’s closing stock price of $0.73.
OnDeck has struggled to compete in its market for some time. Despite racking up $13 billion in originated loans to more than 115,000 companies, the COVID-19 pandemic hit the firm hard.
In May Forbes learned the firm wanted a buyer to solve a $59 million slump.
Noah Breslow, OnDeck chairman and CEO, says his firm undertook an “extensive review” of its strategic options.
“We believe this is the right path forward for our customers, employees and shareholders,” he adds.
“Joining forces with Enova, a highly-respected and well-capitalised leader in online lending, and leveraging our combined scale and strengths, provides the best opportunity for our long-term success.”
Enova provides online financial services to non-prime consumers and small businesses. It claims to have facilitated more than $20 billion in loans for seven million customers.
“Together, our companies will be stronger because of the complementary strengths and synergies of our businesses,” says David Fisher, Enova CEO.
“Acquiring a premier online small business lender and its bank platform, and welcoming its innovative and talented team to Enova, will increase our scale and resources.”