Online lender Enova International is acquiring struggling rival OnDeck Capital in a deal worth $90m.
Enova splash out a premium of 43% above the 90-day weighted share price of OnDeck as well as a 90% premium based on OnDeck’s closing share price of 73 cents as of July 27.
The deal came after a long period of subpar results from OnDeck with several disappointing quarters.
Last year, JPMorgan Chase revealed the investment bank would no longer be originating new loans on OnDeck’s platform.
At the time, Noah Breslow, chairman and CEO of OnDeck, put on a brave face despite the abysmal quarterly results that followed JPMorgan Chase upsticking from the business.
Yet, the company kept struggling and OnDeck’s problems reportedly only got worse following the outbreak of Covid-19.
And now it has been acquired.
“Following an extensive review of our strategic options, we believe this is the right path forward for our customers, employees and shareholders,” said Breslow. “Joining forces with Enova, a highly respected and well capitalized leader in online lending, and leveraging our combined scale and strength, provides the best opportunity for our long-term success.”
Following the acquisition, Breslow will become vice chairman of the combined company.
David Fisher, chairman, president and CEO of Enova, told analysts on a quarterly earnings call that he had been impressed by OnDeck.
“They are a leader in non-bank lendings to small businesses,” he said. “And we believe this transaction brings together two highly complementary market-leading businesses with world class capabilities in both consumer and small business lending.”