Huntington Bancshares Incorporated (HBAN) is set to further strengthen its Michigan footprint with the latest acquisition deal. The Columbus, OH-based company will acquire Macquarie Equipment Finance, Inc. (‘MEF-US’) from its parent company, Australia-based Macquarie Group Ltd. The deal is expected to close by the end of Mar 2015 and is anticipated to be accretive to Huntington’s earnings in the first year.
Though the financial terms and conditions of the deal remained undisclosed, there was speculation in the market that the deal value might have been struck at $380 million.
Based in Bloomfield Hills, Michigan, MEF-US, is a leading company in the U.S., providing specialized technology financing and asset management services to firms, technology manufacturers and suppliers globally. The company’s annual originations stand at around $500 million.
Macquarie Equipment Finance was put up for sale in Nov 2014, as per the Australian Financial Review report. Macquarie had acquired the unit in 2008 from CIT Group Inc. (CIT) for an undisclosed amount. For selling the unit, Macquarie had approached banks like EverBank Financial Corp., City National Corp. (CYN), U.S. Bancorp, Fifth Third Bancorp and KeyCorp. (KEY), before zeroing in on Huntington.
As per the deal, Huntington will assume assets of around $900 million and around $630 million of debt, securitizations and other liabilities. The deal will add 165 jobs to the bank’s employee base.
Per Huntington CEO, Stephen D. Steinour, “The acquisition of Macquarie Equipment Finance is an important expansion of Huntington’s current capabilities, adding a national technology and healthcare platform to help drive our ongoing growth.” Rick Remiker, commercial banking director for Huntington, noted that Huntington Equipment Finance has organically grown by over 200% in the last five years.
The latest deal seems to be part of Huntington's strategy to boost its footprint in Michigan, which is believed to be a lucrative market for the company. Fortifying the Michigan branch network, last year the company completed the acquisition of 24 branches in Michigan from Bank of America Corp.
Further, apart from a series of public-private alliances in Michigan, the company initiated a strategic collaboration in 2012 with Meijer, Inc. – a retail chain based in Michigan – in order to establish in-store locations. The company is running over 40 in-store branches and aims to set up more than 80 branches in Meijer's Michigan stores by 2020.
Huntington currently carries a Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment