An investor group led by growth investment giant Warburg Pincus announced Monday plans to acquire Exeter Finance, an Irving-based indirect auto finance company with a more than $7 billion loan portfolio.
The investor group will pick up the company as part of a definitive agreement from funds managed by Blackstone.
Exeter Finance and Blackstone selected Citi to lead as financial advisor with additional representation from Barclays, Deutsche Bank and Wells Fargo.
Skadden, Arps, Slate, Meagher & Flom represented Exeter Finance and Blackstone on legal matters with a New York-based M&A team led by partners Allison Schneirov and Christopher Barlow, counsel Matthew Nemeroff and associate Justin Top.
Walt Evans serves as general counsel at Exeter Finance. He formerly worked at ACE Cash Express and Hollywood Casino Corp. with associate-level ties at Akin, Gump, Strauss, Hauer & Feld and Hughes & Luce, now K&L Gates.
Wachtell, Lipton, Rosen & Katz served as legal advisor to the acquiring investor group, while J.P. Morgan acted as financial counsel.
New York-based partners Edward D. Herlihy, Mark F. Veblen and Jenna E. Levine led the Wachtell team.
Terms of the transaction were not disclosed. Pending customary closing conditions, the deal is expected to close by the end of the year.
As part of the deal, Jason Grubb will remain in-place as chief executive at Exeter Finance and a “meaningful investor,” along with the current management team. Grubb took on the role in 2016 after more than a decade at Santander Consumer USA.
Blackstone acquired Exeter Finance, which underwrites, purchases, services and securitizes retail installment contracts from auto dealers and customers, in 2011 from Atlanta private equity firm Navigation Capital Partners.
Exeter Finance was primed to enter the public markets in 2019 by way of an initial public offering, but withdrew its plans the same year, citing market conditions. At the time of the proposed IPO, Exeter Finance had a loan book of about $4 billion and planned to raise a maximum of $100 million on the New York Stock Exchange with Blackstone expecting to retain majority ownership.
Opportunities tied to subprime loans and distressed debt – especially for private equity – are expected to continue to heat up this year and on into the next as stimulus funding, eviction moratoria, expanded employment benefits and other financial buoys slowly dry up.