Consumer Portfolio Services Agrees to Acquire MFN Financial Corporation
Consumer Portfolio Services, Inc., headquartered in Irvine, Calif., announced Nov. 19 that it has signed a definitive agreement to acquire MFN Financial Corp., headquartered in Lake Forest, Ill., for $10 per share of MFN Financial Corp. common stock, plus transaction related expenses and other contractual obligations. The boards of both companies have approved the agreement.
Levine Leichtman Capital Partners, a Los Angeles-based private equity firm, has committed to provide acquisition financing.
The transaction is subject to approval by the stockholders of MFN Financial Corp., requisite regulatory review and other conditions, and is expected to be completed in the first quarter of 2002.
"The addition of MFN's portfolio, operations and products to CPS's servicing and collection strengths will result in the creation of a strong competitor in the subprime automobile finance industry," said Charles E. Bradley, Jr., president and chief executive officer of Consumer Portfolio Services, Inc. "The acquisition will double both the size of the CPS servicing portfolio and its servicing capacity, and increase the range of products available to the automobile dealership community. The merger will provide each company the expanded benefits and opportunities of being a part of a larger company, without losing any of the qualities that have allowed CPS and MFN to survive, and rebound, in a difficult industry," Bradley said.
"We are convinced that the proposed transaction with CPS is in the best interest of our shareholders," said Jeffrey B. Weeden, president and chief executive officer of MFN Financial Corp. "The combination of our two operations will offer automobile dealers a wider range of financing options for their customers and offer provide new opportunities for our employees," Weeden said.
About Consumer Portfolio Services, Inc.
Consumer Portfolio Services, Inc. purchases, sells and services retail installment sales contracts originated predominantly by franchised dealers for new and late model used cars.
The company finances automobile purchases through over 4,000 dealers under contract throughout the United States.
About MFN Financial Corp.
MFN Financial Corp. is a consumer finance company whose principal operating subsidiary is Mercury Finance Company LLC.
Mercury Finance Company LLC provides specialized, individual financing for automobile nonprime credit buyers through automobile dealerships.
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