Discover to Acquire Mortgage Origination Business from Tree.com for $55.9 Million
12 Maggio 2011 - 10:04PM
Business Wire
Discover Financial Services (NYSE: DFS) announced today that it
has reached a definitive agreement to acquire substantially all of
the operating and related assets of Home Loan Center, a subsidiary
of Tree.com, Inc. (NASDAQ: TREE) for approximately $55.9 million,
adding a residential mortgage component to Discover’s
direct-to-consumer banking business.
Discover intends to originate eligible consumer mortgages to
sell in secondary markets on a servicing-released basis. The
company anticipates that the acquisition will have a nominal impact
on its 2012 earnings. Home Loan Center, which operates as
LendingTree Loans, originates and processes consumer mortgage loans
nationwide.
“Discover is acquiring a proven operating platform that we can
scale by leveraging our brand and lending expertise,” said Carlos
Minetti, president of consumer banking and operations for Discover.
“This will enable us to expand our line of banking products and
provide home loans to consumers.”
Discover’s array of banking products include credit cards,
personal loans, private student loans, certificates of deposit,
savings accounts and Roth individual retirement accounts.
“The Home Loan Center platform, with its outstanding team and
operational excellence, is a great fit for Discover,” said Doug
Lebda, chairman and chief executive officer of Tree.com. “This deal
will enable Tree.com to focus on our core lead generation
business.”
The acquisition is subject to the approvals of regulators and
Tree.com, Inc. stockholders, and is expected to close by the end of
2011.
A conference call to discuss the planned acquisition will be
held at 8 a.m. Central time on May 13, 2011, and can be accessed by
dialing 1-888-895-5479 (U.S. domestic) or 1-847-619-6250
(international), passcode 29786461. The call will be accessible as
an audio webcast through the Investor Relations section of the
Discover website at www.discoverfinancial.com. For those unable to
listen to the live broadcast, a replay will be available on the
company’s website or by dialing 1-888-843-7419 (U.S. domestic) or
1-630-652-3042 (international), passcode 29786461, beginning at
approximately 10:30 a.m. Central time. The replay of the conference
call will be available through June 12, 2011.
About Discover
Discover Financial Services (NYSE: DFS) is a direct banking and
payment services company with one of the most recognized brands in
U.S. financial services. Since its inception in 1986, the company
has become one of the largest card issuers in the United States.
The company operates the Discover card, America's cash rewards
pioneer, and offers personal and student loans, online savings
accounts, certificates of deposit and money market accounts through
its Discover Bank subsidiary. Its payment businesses consist of
Discover Network, with millions of merchant and cash access
locations; PULSE, one of the nation's leading ATM/debit networks;
and Diners Club International, a global payments network with
acceptance in more than 185 countries and territories. For more
information, visit www.discoverfinancial.com.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are based upon the current beliefs and
expectations of the company’s management and are subject to
significant risks and uncertainties. The transaction is subject to
closing conditions including, among others, Tree.com, Inc.
stockholder approval, company licensing and regulatory approvals,
and proposals for secondary market investor contracts. There can be
no assurance that the transaction will close. The following
factors, among others, could cause actual results to differ
materially from those set forth in the forward-looking statements:
unexpected difficulties or delays in executing the proposed
transaction; the company’s ability to successfully transition and
integrate the new business, including operations, technology and
marketing; the company’s ability to form and maintain relationships
with secondary market investors, servicers, vendors and other
parties related to the transaction and the business; the company’s
ability to retain key employees; the company's ability to
successfully launch and market its own mortgage origination
business and generate profit from such business, which may depend
on refinance volume and relationships with financial intermediaries
including secondary market investors; the company’s ability to
manage expenses related to the new business; the company's ability
to address and manage the impact of current, pending and future
legislation, regulation, regulatory and legal actions, public
policy issues and government involvement in the mortgage industry,
including new laws and rules related to mortgage lending, financial
regulatory reform and capital; the actions and initiatives of
current and potential competitors; the impact of market
fluctuations; and the company’s ability to manage its credit risk.
The forward-looking statements speak only as of the date of this
press release, and there is no undertaking to update or revise them
as more information becomes available.
Additional factors that could cause the company’s results to
differ materially from those described in the forward-looking
statements can be found under "Business - Supervision and
Regulation," "Business - Competition," "Risk Factors," "Special
Note Regarding Forward Looking Statements" and "Management’s
Discussion and Analysis of Financial Condition and Results of
Operations" in the company’s Annual Report on Form 10-K for the
year ended November 30, 2010 and under "Management’s
Discussion and Analysis of Financial Condition and Results of
Operations" in the company's Quarterly Report on Form 10-Q for the
quarter ended February 28, 2011, which are filed with the SEC and
available at the SEC’s internet site (http://www.sec.gov).
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