Capital One to Acquire Onyx Acceptance Corporation
22 September 2004 - 11:00PM
PR Newswire (US)
Capital One to Acquire Onyx Acceptance Corporation MCLEAN, Va.,
Sept. 22 /PRNewswire-FirstCall/ -- Capital One Financial
Corporation (NYSE:COF) and Onyx Acceptance Corporation
(NASDAQ:ONYX) today announced the signing of a definitive agreement
under which Capital One will acquire Onyx for $191 million in an
all-cash transaction. The acquisition will combine Capital One Auto
Finance, Inc. (COAF), an auto finance provider through auto dealers
and direct to consumers, with Onyx. This acquisition significantly
expands COAF's dealer relationships, deepens its coast-to-coast
market penetration, and enhances its product line, especially among
prime borrowers. During the twelve months ended June 30, 2004, Onyx
originated $2.5 billion in auto loans through more than 12,000
active dealer relationships. Ranked by annual originations, the
acquisition will create the second largest independent auto lender
in the United States. "Auto finance is an important component of
our diversification strategy and contributor to our bottom line,"
said Richard D. Fairbank, Chairman and Chief Executive Officer of
Capital One. "This acquisition provides expanded growth
opportunities and creates synergies that will generate value for
our shareholders." Onyx's senior management, led by President and
Chief Executive Officer John Hall, will play an important role in
Capital One Auto Finance's business. Hall will report to Capital
One's Executive Vice President and President of Capital One Auto
Finance David R. Lawson. Hall said, "Onyx is pleased to join
Capital One Auto Finance, which has evolved as a leader in auto
finance over the last few years. This combination allows us to
bring full spectrum product offerings and direct marketing programs
to our dealers." "This transaction combines two strong franchises
with complementary strengths," said Lawson. "Onyx's significant and
long-standing presence with California dealerships coupled with its
strong prime program fills out both COAF's product offering and
geographic footprint. Together, we expect to realize significant
revenue and cost synergies," said Lawson. Under the terms of the
agreement, Onyx shareholders will receive cash of $28 per share.
The $191 million aggregate purchase price represents a multiple to
book value of 2.2x and a 3.7 percent premium to Onyx's $2.8 billion
in managed receivables as of June 30, 2004. The transaction, which
was approved by the boards of directors of both companies, is
subject to regulatory and Onyx shareholder approval and is expected
to close early in the first quarter of 2005. The transaction,
including the associated restructuring costs, is not expected to
have a material effect on Capital One's earnings in 2005. The
companies caution that current expectations in this release for
their earnings, synergies and strategy are forward-looking
statements and actual results could differ materially from current
expectations due to a number of factors, including competition in
the auto finance and consumer lending industries, the companies'
abilities to integrate operational and strategic platforms, and
general economic conditions affecting consumer income and spending,
which may affect consumer bankruptcies, defaults, and charge-offs.
A discussion of these and other factors can be found in Capital
One's and Onyx's annual reports and other reports filed with the
Securities and Exchange Commission, including, but not limited to,
Capital One's and Onyx's report on Form 10-K for the fiscal year
ended December 31, 2003. NOTE TO INVESTORS Onyx will file a proxy
statement and other documents regarding the proposed merger
described in this press release with the Securities and Exchange
Commission. Investors and security holders are urged to read the
proxy statement when it becomes available, because it will contain
important information about Onyx and Capital One and the proposed
transaction. A definitive proxy statement will be sent to security
holders of Onyx seeking their approval of the transaction.
Investors and security holders may obtain a free copy of the
definitive proxy statement (when available) and other documents
filed by Onyx and Capital One with the SEC at the SEC's web site at
http://www.sec.gov/. The definitive proxy statement and other
relevant documents may also be obtained free of cost by directing a
request to Onyx, 27051 Towne Centre Dr., Ste. 100, Foothill Ranch,
CA 92610, attention Investor Relations, Telephone: (949) 465-3808.
Onyx and Capital One and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the shareholders of Onyx in connection with the
merger. Information about Onyx and Capital One and their respective
directors and officers can be found in Onyx's and Capital One's
Proxy Statements and Annual Reports on Form 10-K filed with the
SEC. Additional information regarding the interests of those
persons may be obtained by reading the proxy statement when it
becomes available. About Capital One Headquartered in McLean,
Virginia, Capital One Financial Corporation
(http://www.capitalone.com/) is a holding company whose principal
subsidiaries, Capital One Bank and Capital One, F.S.B., offer
consumer lending products and Capital One Auto Finance, Inc.,
offers automobile and other motor vehicle financing products.
Capital One's subsidiaries collectively had 46.6 million accounts
and $73.4 billion in managed loans outstanding as of June 30, 2004.
Capital One, a Fortune 500 company, is one of the largest providers
of MasterCard and Visa credit cards in the world. Capital One
trades on the New York Stock Exchange under the symbol "COF" and is
included in the S&P 500 index. About Onyx Onyx Acceptance
Corporation (http://www.onyxacceptance.com/) is a specialized
automobile finance company based in Foothill Ranch, California.
Onyx provides auto financing to franchised and select independent
dealerships throughout the United States. DATASOURCE: Capital One
Financial Corporation CONTACT: Paul Paquin, Investor Relations,
+1-703-720-2456, or Tatiana Stead, Media, +1-703-720-2352, both of
Capital One; or John Hall, President and CEO, +1-949-465-3503, or
Don Duffy, CFO, +1-949-465-3505, both of Onyx Web site:
http://www.capitalone.com/ http://www.onyxacceptance.com/
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