Stellantis Takes Step to Launch Captive Finance Company
In a transaction worth approximately $285 million, Stellantis plans to acquire F1 Holdings Corp., parent company to First Investors Financial Services Group.
The deal is expected to close by the end of 2021, with Stellantis driven by a strategy to establish a U.S. captive finance company.
Image courtesy of Stellantis NV
Stellantis NV announced on Sept. 1 that it has entered into a definitive agreement to acquire F1 Holdings Corp., parent company to First Investors Financial Services Group, in an all cash transaction for approximately $285 million, subject to adjustments for closing balance sheet and certain outstanding options from an investor group led by Gallatin Point Capital LLC and including affiliates of Jacobs Asset Management, LLC.
Carlos Tavares, CEO of Stellantis, said: “This transaction marks a significant milestone in Stellantis’ sales finance strategy in the critical U.S. market. First Investors has an outstanding financial and operational platform, underpinned by a strong management team, with vast experience in the auto finance space. Direct ownership of a finance company in the U.S. is a white-space opportunity which will allow Stellantis to provide our customers and dealers a complete range of financing options, including retail loans, leases, and floorplan financing in the near-to-medium term.”
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Stellantis’ news release said that its objective is to establish a U.S. captive finance company to support its sales and capitalize on its market position while creating long-term value for shareholders. The acquisition of First Investors allows Stellantis to create a platform to grow a full-service captive finance organization. Stellantis is the only major OEM currently operating in the U.S. without a captive auto finance company.
The transaction is intended to generate significant potential for accretive earnings and improving customer loyalty for Stellantis's Jeep, Ram, Dodge, Chrysler, Fiat and Alfa Romeo brands.
Tommy Moore, Jr., president and CEO of First Investors, noted: “We are excited to join the Stellantis team. Becoming part of Stellantis provides long-term stability for our company and employees. We believe that there are significant untapped growth opportunities for First Investors under Stellantis ownership as we expand our product suite to support the auto sales growth of Stellantis. The First Investors management team is fully committed to ensuring a smooth and rapid integration into Stellantis. Meanwhile, we remain committed to continuing to offer our loans and services to our existing network of dealers and current business partners.”
The transaction is expected to close by the end of 2021, subject to customary closing conditions and regulatory approvals.
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