Capital One to Acquire ING to Create the Fifth Largest Bank
JULY 2011
MINNESOTA MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
26
Capital One Financial Corporation has announced a definitive agreement under which it will acquire ING Direct from ING Groep by the end of 2011 in a stock and cash transaction valued at approximately $9 billion. Currently the eighth largest bank in the United States, based on deposits, Capital One’s acquisition of ING Direct combines ING Direct’s valuable national direct deposit franchise with Capital One’s advantaged access to assets and local scale branch banking. When the deal closes, Capital One will become the fifth largest bank in the United States. The combination strengthens Capital One’s customer franchise and brand and provides significant financial and strategic upside with low execution risk. Under the agreement, Capital One will purchase ING Direct from ING Groep for $6.2 billion in cash and approximately 55.9 million Capital One shares, valued at $2.8 billion, based on a Capital One share price of $50.07, the 10-day average of Capital One closing prices for the period ending June 15, 2011. Capital One expects to finance the cash portion of the consideration, in part, through a public equity raise of approximately $2 billion and debt offerings of approximately $3.7 billion prior to the close of the transaction. ING is currently one of only a few lenders nationwide offering jumbo loans. As part of the deal, Capital One will also acquire ING Mortgage. “The acquisition of ING Direct is a game-changing transaction that delivers attractive deal economics immediately and compelling long-term strategic value,” said Richard D. Fairbank, chairman and CEO of Capital One. “The combination of Capital One and ING Direct creates a unique and valuable banking franchise that includes advantaged access to assets, great local scale branch banking in attractive markets, and with ING Direct, the leading direct bank customer franchise with national reach. Adding ING Direct enhances and sustains key sources of shareholder value over the long-term, including growth, returns and capital generation.”
Capital One will work closely with ING Direct’s leadership team to establish a management structure designed to ensure that the combined company achieves the highest quality integration and has the best leadership in place to build on ING Direct’s great customer franchise. ING will maintain a 10 percent stake in Capital One and the right to one director on the company’s board.
Ellie Mae Realignment to Focus on Encompass360 Clientele Ellie Mae has realigned its sales and client relations divisions to focus on maximizing return on investment for key Encompass360 clients. Two senior executives—Devin Daly and Joseph Tyrrell—have been appointed to spearhead a strategic initiative that emphasizes enhanced communication and collaboration among the 40 in-house and field sales and client service team members that assist key clients and high volume accounts with business operational assessment, system configuration, implementation, training and long-term usage of their Encompass360 software. By creating this new initiative, Ellie Mae is formalizing the means by which its in-house and field sales and client service team members gain a deeper understanding of key clients’ current and future business needs, as well as the way they leverage and communicate that information across multifunctional teams within the company. This initiative includes efforts such as client operations and workflow process reviews and analyses, which provide team members with the information they need to present or create the tailored solutions that help maximize the clients’ benefits from using Encompass360. Daly, who was hired as the company’s vice president of client services, oversees a field staff of sales engineers and managers that work with lenders to implement Encompass360. He is also responsible for client education and training, and is charged with creating and implementing processes for addressing each client’s specific needs throughout the implementation process. Daly has more than 15 years of management and technology experi-
ence. Prior to joining Ellie Mae, he was the founder of Source Holdings, a CRM software-as-a-service provider to the mortgage industry, and was also chief technology officer for Refinance.com. His background includes additional work with Altara Inc., a reseller and consultant of Microsoft business solutions, where he ran the professional services operation. Tyrrell has been hired as the company’s new vice president of strategic client relationships. He is charged with creating and implementing processes for the way that the Ellie Mae account management staff assists key clients in optimizing their Encompass360 systems after implementation. His team of strategic account managers is responsible for consulting with key clients to help them drive greater efficiencies, as well as to identify and close any potential compliance gaps within the client’s internal processes. Tyrrell returned to Ellie Mae after spending five years as a business process and strategic relationship consultant for several companies in the mortgage and insurance industries. His previous position with Ellie Mae was senior vice president of strategic partnerships.
Kinecta and NuVision Announce Plans to Merge K i n e c t a Federal Credit Union and NuVision Federal Credit Union have announced that they have filed an application with the National Credit Union Administration (NCUA) to merge the two credit unions. The boards of each credit union approved moving to the next phase of the merger process after extensive due diligence confirmed the added benefits a combined organization will bring to their collective members, sponsor companies and communities. The merger will immediately expand each credit union’s branch/ATM network with 51 branches and 112 ATMs, primarily throughout Los Angeles and Orange Counties, as well as bring members a wider choice of products and services. Longer term, the economies of scale of a larger organization provide added resources to expand branches, products, member service initiatives and electronic delivery channels. “We’re excited to take the next step toward bringing two successful organizations together to deliver better service and convenience to our members, sponsor companies, employees and communities,” said Darryl Johnson, chair of the board of Kinecta. “Not only will this merger bring members more branches and products, it will build an even stronger foundation for long-term success.” Roger Ballard, currently joint chief executive officer of Kinecta and NuVision, will become chief executive officer of the new combined organization, which will retain the Kinecta
Federal Credit Union name and charter. Pending regulatory approval, the merger will be put to NuVision member vote. “Submitting our formal merger application moves us closer to creating a stronger, more competitive credit union that will bring our members greater value than either of us can as independent organizations,” said Robert Geraci, chairman of the board of NuVision. “The due diligence process reinforced our belief in the benefits of this merger, with even more synergies than expected between our goals and organizations.”
Mortgage Cadence Forms New Finale Doc Prep Division Mortgage Cadence LLC has announced that it will spin off its compliance, content and document preparation division, Mortgage Cadence Finale, into a separate entity, Finale Document Services. Finale allows lenders to create initial disclosures, interim packages, closing packages, loan modification packages, short sale documents and any other financial document and deliver them securely to the borrower or settlement agent in seconds. The tool was integrated into the company’s ELS offering (Orchestrator), but has since found a larger market as a standalone. “We’ve been in the compliance, content, document creation and management business since 1999 and have invested tens of millions of dollars into this product line and the seasoned team that supports it,” said Michael Detwiler, chief executive officer of Mortgage Cadence. “I pushed my team to develop an industry-leading document preparation and delivery solution powered by our proprietary rules engine because we could no longer stand idly while the industry continued to be underserved. We have streamlined implementations and eliminated document-related problems and compliance issues while increasing client satisfaction across the board. An amazing statistic to note is that since inception, we haven’t lost a single Finale customer to a competitor. That statement alone speaks volumes.” Finale contains an array of features, including the ability to: Generate forms dynamically for each individual and unique transaction; eliminate the rekeying of data; automate the document generation/distribution processes; and maintain strict compliance. The system can generate fully compliant forms for Fannie Mae, Freddie Mac, FHA and VA programs, as well as federal and state disclosures and supports all other investors as well. The platform supports doc prep for truly any financial transaction including first mortgages, second mortgages, HELOC’s, loan modifications, short sale, and forward and reverse mortgages.