The combined company will be approximately 16.7% owned by OnDeck shareholders
Chicago-based FinTech Enova International has agreed to acquire OnDeck in a cash and stock transaction valued at approximately $90m.
Under the terms of the transaction agreement, from the total transaction value of $90m, $8m will be paid in cash. OnDeck shareholders will receive $0.12 cents per share in cash and 0.092 shares of Enova common stock for each share of OnDeck.
OnDeck’s brand, together with its products and services will be added to the Enova’s existing portfolio, to create a combined company that offers different products in consumer and small business market segments.
Upon completion of the transaction, the combined company will be approximately 16.7% owned by OnDeck shareholders, while Enova shareholders will own approximately 83.3%.
The transaction is expected to enable both Enova and OnDeck to provide support for small businesses and consumers amid the Covid-19 pandemic.
OnDeck acquisition to result in $50m in annual cost synergies for Enova
The combined company will become an online financial services company with enhanced scale, diversified revenues, stronger cash flow potential, and increased flexibility.
Furthermore, the transaction is expected to benefit Enova through around $50m in annual cost synergies and $15m in run-rate net revenue synergies by the end of 2022.
The transaction is expected to be completed this year, subject to OnDeck shareholder approval and HSR approvals, along with customary closing conditions
OnDeck chairman and CEO Noah Breslow said: “I am proud of the business we have built and the more than $13 billion of financing we have provided to underserved small businesses since our founding in 2006.
“Following an extensive review of our strategic options, we believe this is the right path forward for our customers, employees and shareholders. Joining forces with Enova, a highly-respected and well-capitalized leader in online lending, and leveraging our combined scale and strengths, provides the best opportunity for our long-term success.”