December 2014
Specialty Finance
Industry Insights
A review of M&A activity and
public market valuation in the
consumer and commercial
specialty finance sectors
About William Blair
Investment Banking
William Blair’s investment banking group combines significant transaction experience,
rich industry knowledge, and deep relationships to deliver successful advisory and
financing solutions to our global base of corporate clients. We serve both publicly traded
and privately held companies, executing mergers and acquisitions, growth financing,
financial restructuring, and general advisory projects. This comprehensive suite of
services allows us to be a long-term partner to our clients as they grow and evolve. From
2010 - 2013, the investment banking group completed 250 merger-and-acquisition
transactions worth more than $52 billion in value, involving parties in 27 countries and
four continents, was an underwriter on over 20% of all U.S. initial public offerings and
arranged more than $11.5 billion of debt financing.
William Blair
Table of Contents
Introduction .....................................................................................................................................................................................................................................................1
Consumer Specialty Finance .....................................................................................................................................................................................................................2
M&A Trends.................................................................................................................................................................................................................................................2
Select M&A Transactions .......................................................................................................................................................................................................................3
Public Valuation Update .........................................................................................................................................................................................................................4
Commercial Specialty Finance..................................................................................................................................................................................................................7
M&A Trends.................................................................................................................................................................................................................................................7
Select M&A Transactions .......................................................................................................................................................................................................................8
Public Valuation Update .........................................................................................................................................................................................................................9
Capital Markets Transactions ................................................................................................................................................................................................................ 12
Recent Equity Offerings ....................................................................................................................................................................................................................... 12
Recent Debt Offerings .......................................................................................................................................................................................................................... 14
Recent Preferred Equity Offerings .................................................................................................................................................................................................. 15
Financial Services & Technology Analysts and Coverage .......................................................................................................................................................... 16
Investment Banking Team Biographies ............................................................................................................................................................................................ 17
Select William Blair Transactions ........................................................................................................................................................................................................ 18
Disclosures..................................................................................................................................................................................................................................................... 19
Specialty Finance Industry Insights
Table of Contents
William Blair
Introduction
Specialty finance can be broadly defined as any financing activity that takes place outside the traditional banking system. Typically,
specialty finance firms are thought of as non-bank lenders that make loans to consumers and small to midsize businesses that cannot
otherwise obtain financing. This report covers trends in M&A activity, transaction multiples, and public company valuations in the
consumer and commercial specialty finance sectors. Specifically, consumer specialty finance includes auto finance, collection,
alternative financial services, credit card, and mortgage companies. Commercial specialty finance includes business development
companies (BDCs), commercial finance, commercial real estate lending, and leasing companies. We hope you enjoy this report, and
we welcome any feedback.
Summary of M&A Activity
Both the M&A and equity markets have been performing strongly this year. Total global year-to-date M&A volume is over $2.5
trillion, up over 43% from the same time period last year and during the same time, the number of new equity issuances (both initial
public offerings and follow-on offerings) is up over 20%. While some industry veterans believe valuations are ahead of themselves,
deal activity suggests otherwise.
This theme persists within the specialty finance sector, and we believe 2014 M&A activity will remain strong for high quality
companies in this sector. Large strategic acquirers with healthy war chests will likely continue to pursue companies with
differentiated solutions, go-to-market strategies, and proven strong growth and profitability. In addition, private-equity firms remain
highly active in the specialty finance sector. Aging portfolio companies of private-equity firms – in particular, specialty finance
businesses purchased before or during the downturn – may create liquidity opportunities in the near to midterm and will continue to
fuel middle-market M&A activity.
Specialty finance companies generate high margins and recurring cash flows. In addition, these companies have meaningful
operating leverage. As a result, M&A transactions in the sector are generally completed at attractive multiples. Since 2002,
approximately 56% of the aggregate deals in the consumer specialty finance sector have been completed at above 10.0 times LTM
net income, and approximately 19% have been completed at more than 3.00 times LTM book value. On the commercial specialty
finance side, approximately 44% of the aggregate deals since 2002 have been completed at above 10.0 times LTM net income, and
approximately 20% have been completed between 1.50 and 3.00 times LTM book value. Acquirers in the sector are most often
strategic parties that are able to pay more because of the significant revenue synergies generated by pushing new or stronger finance
products through an established distribution platform. In addition, many private-equity funds have developed a differentiated level
of industry knowledge and expertise, and as a result have established strong reputations in the sector.
In 2014 thus far, M&A activity in the sector has been strong, driven primarily by strategic acquirers looking for new
products/segments, differentiated platforms, and strong growth. Examples include Banco Santander’s acquisition of Carfinco
Financial Group and GoldenTree Asset Management’s acquisition of Origen Financial. While global economic uncertainty may cause
the broad universe of buyers and sellers to proceed more cautiously into 2015, we remain optimistic that both M&A and capital
markets activity will remain strong for solidly performing businesses.
Robert Metzger
+ 312 364 8517
rmetzger@williamblair.com
J.P. Young
+1 312 364 8160
jyoung@williamblair.com
Kegan Greene
+1 312 364 8113
kgreene@williamblair.com
Specialty Finance Industry Insights
Introduction 1
Consumer
Specialty
Finance
Sector
William Blair
Consumer Specialty Finance
M&A Trends
•
Year-to-date aggregate M&A transaction volume is running slightly behind the comparable period in 2013, though disclosed
dollar volume is meaningfully higher over the same period.
•
Approximately 56% of the aggregate deals since 2002 have been completed at above 10.0 times LTM net income, and
approximately 19% have been completed at more than 3.00 times LTM book value.
•
Transactions less than $50 million were completed at an average of 5.9 times LTM net income, meaningfully lower than LTM net
income multiples on deals above $50 million.
Historical Transaction Volume
100
80
60
40
20
0
Average: 50
79
54
53
47
41
2002
2003
(16.7%)
75
2004
2005
2006
2007
32
33
46
50
2008
2009
2010
2011
42
47
2012
2013
36
30
2013
YTD
2014
YTD
Historical Transaction Dollar Volume ($ in millions)
($ in millions)
$60,000
$40,000
$20,000
Average: $16,322
$51,379
$26,075
$17,055
$43,055
$16,926
$8,866
$12,024
2002
2003
2004
2005
$2,090
$3,299
$2,754
2007
2008
2009
2006
LTM Net Income Multiple Breakdown
2010
53.3%
Less than 5.0x
LTM Net Income Multiple by Transaction Size
10.0x
13.4x
5.9x
8.1x
5.0x
0.0x
<$50mm
$50mm - $100mm
Source: SNL Financial and William Blair’s market analysis.
Note: Year-to-date as of October 31, 2014.
Specialty Finance Industry Insights
2 Consumer Specialty Finance
2012
2013
18.7%
5.0x to 10.0x
15.0x
2011
$1,807
$5,552
2013
YTD
2014
YTD
LTM Book Value Multiple Breakdown
Greater than 10.0x
55.9%
$10,519
$1,817
15.3%
28.8%
207.2%
>$100mm
Greater than 3.00x
1.50x to 3.00x
28.0%
Less than 1.50x
LTM Book Value Multiple by Transaction Size
1.50x
1.40x
1.30x
1.20x
1.10x
1.00x
0.90x
1.36x
1.24x
<$50mm
$50mm - $100mm
1.34x
>$100mm
William Blair
Select M&A Transactions
Transaction Value /
Announced
Date
Sub-Sector
Buyer Name / Target Name
10/21/14
Auto
Fortress Investment Group LLC/ Omnisure Group, LLC
10/08/14
Mortgage
Morrison Grove Capital Advisors/ MMA Financial TC LLC
09/24/14
Collection
Arrow Global Group PLC/ Capquest Group Limited
09/23/14
Auto
Mint Leasing, Inc./ Investment Capital Fund Group, LLC
09/16/14
Auto
Banco Santander SA/ Carfinco Financial Group Inc.
09/11/14
Mortgage
Home Point Capital/ Maverick Funding Corp.
09/09/14
AFS
GoldenTree Asset Management LP/ Origen Financial, Inc.
08/25/14
AFS
First Cash Financial Services, Inc./ CAMex Holding, LLC
08/06/14
Mortgage
ZAIS Financial Corp./ GMFS, LLC
08/01/14
Collection
Encore Capital Group, Inc./ Atlantic Credit & Finance, Inc.
07/07/14
Auto
07/02/14
Mortgage
Transaction
Value
-
LTM Net
Income
-
LTM Book
Value
-
$15.9
-
-
$258.2
-
-
-
-
-
$297.8
13.8x
4.08x
-
-
-
$483.3
-
2.91x
-
-
-
$63.0
5.7x
$196.1
-
-
Milestone Partners/ PayLink Payment Plans, LLC
-
-
-
MutualFirst Financial, Inc./ Summit Mortgage, Inc.
-
-
-
06/05/14
Mortgage
Strategic Growth Bank Inc./ Guardian Mortgage Company, Inc.
05/05/14
Mortgage
Freedom Mortgage Corporation/ BluFi Lending Corporation
$25.7
-
-
-
-
-
04/17/14
AFS
LendingClub Corporation/ Springstone Financial LLC
$140.0
14.5x
-
04/16/14
04/15/14
AFS
Nelnet, Inc./ Education Lending Services, Inc.
$127.1
-
-
AFS
Aaron's/ Progressive Finance Holdings
$700.0
-
-
04/02/14
AFS
Lone Star Funds/ DFC Global
$1,417.0
-
0.79x
03/27/14
Auto
Sunset Brands, Inc./ MotorMax
-
-
-
03/26/14
Mortgage
Investor group/ Southern Trust Mortgage LLC
-
-
-
03/03/14
Mortgage
InterLinc Mortgage Services, LLC/ Hometown Mortgage Services, Inc.
-
-
-
03/01/14
Mortgage
First Bells Bankshares, Inc./ Cendera Funding, Inc.
-
-
-
02/19/14
Collection
Portfolio Recovery Associates, Inc./ Aktiv Kapital AS
02/12/14
Mortgage
American Advisors Group/ Reverse mortgage division
02/07/14
Collection
Encore Capital Group, Inc./ Marlin Financial Group Limited
01/29/14
Mortgage
CapStar Bank/ Farmington Financial Group, LLC
$1,315.0
-
-
-
-
-
$512.9
-
-
-
-
-
01/14/14
Mortgage
Fidelity Homestead Savings Bank/ NOLA Lending Group, LLC.
-
-
-
01/13/14
Mortgage
Stonegate Mortgage Corporation/ Medallion Mortgage Company, LLC
-
-
-
01/06/14
Mortgage
Sterling Capital Partners/ Diamond Mortgage Group, LLC
-
-
-
01/01/14
AFS
Lone Star, ACA/ Texas Land Bank, ACA
12/31/13
AFS
Asta Funding, Inc./ CBC Settlement Funding, LLC
-
-
-
$5.0
-
-
12/31/13
Mortgage
12/31/13
Mortgage
Guaranteed Rate, Inc./ Arbor Mortgage Corporation
-
-
-
Guaranteed Rate, Inc./ Sun State Home Loans
-
-
-
12/31/13
12/06/13
Mortgage
Guaranteed Rate, Inc./ Nationwide Direct Mortgage
-
-
-
AFS
Private investors/ GFC Lending, LLC
-
-
12/03/13
-
Mortgage
Aris Mortgage Holding Company, LLC/ AmeriHome Mortgage Corporation
-
-
-
11/30/13
AFS
DFC Global Corp./ Monte Caja Oro
-
-
-
11/29/13
AFS
Pine Tree Equity Management, LP/ North State Acceptance, LLC
-
-
-
11/14/13
Mortgage
Tiptree Financial Inc./ Luxury Mortgage Corp.
$5.0
-
-
11/14/13
Mortgage
Stonegate Mortgage Corporation/ Crossline Capital Inc.
-
-
-
11/07/13
Mortgage
Stonegate Mortgage Corporation/ Wholesale Lending Channel
-
-
-
Specialty Finance Industry Insights
Consumer Specialty Finance 3
William Blair
Public Valuation Update
Auto Finance
Indexed Price / LTM Earnings Ratios as of 10/31/2014
16.0x
Current:
12.7x
14.0x
12.0x
10.0x
8.0x
6.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Net Income
TBVPS
Asset
CAGR
ROAA
ROAE
3-Yr
CAGR
Margin
LTM
08'-13'
LTM
LTM
LTM
LTM
Company
Equity
Stock
Market
Price
Ticker 10/31/14 Cap.
Ally Financial Inc.
ALLY
$22.70 $10,891.9
4.8x
NMF
12.9x
0.78x
(4.4%)
0.6%
5.0%
NMF
America's Car-Mart Inc.
CRMT
$45.98
$392.6
0.4x
18.7x
18.1x
1.83x
12.3%
6.0%
9.7%
(9.2%)
4.5%
Consumer Portfolio Services, Inc.
CPSS
$7.06
$179.1
NMF
8.0x
7.9x
1.47x
(3.2%)
1.8%
27.6%
NA
21.4%
Credit Acceptance Corp.
CACC
$147.56
$3,039.4
2.2x
13.1x
11.9x
4.32x
16.4%
10.1%
36.0%
11.9%
40.7%
Santander Consumer USA Holdings
Inc.
SC
$18.50
$6,455.4
NMF
10.3x
8.0x
2.03x
NA
2.3%
21.6%
NA
25.4%
Mean
$4,191.7
2.5x
12.6x
11.8x
2.09x
5.3%
3.7%
22.5%
1.4%
21.7%
Median
$3,039.4
2.2x
11.7x
11.9x
1.83x
4.6%
2.0%
24.6%
1.4%
21.4%
Debt /
Equity
EPS
LTM
FY2014
16.5%
Collection
Indexed Price / LTM Earnings Ratios as of 10/31/2014
22.0x
Current:
11.7x
18.0x
14.0x
10.0x
6.0x
2.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Company
Equity
Stock
Market
Price
Ticker 10/31/14 Cap.
Asta Funding Inc.
ASFI
$8.43
$109.5
Encore Capital Group, Inc.
ECPG
$45.51
$1,166.5
4.4x
12.4x
Performant Financial Corporation
PFMT
$8.63
$420.5
1.2x
21.6x
PRA Group, Inc.
PRAA
$63.25
Mean
Median
Specialty Finance Industry Insights
4 Consumer Specialty Finance
Debt /
Equity
0.2x
TBVPS
EPS
LTM
9.9x
Net Income
FY2014 LTM
NMF
Asset
CAGR
ROAA
08'-13'
LTM
0.61x
(15.5%)
10.4x
NMF
22.4x
NMF
ROAE
3-Yr
CAGR
Margin
LTM
LTM
LTM
(2.1%)
6.9%
47.5%
28.5%
37.4%
6.3%
15.8%
19.9%
9.7%
NA
10.6%
NMF
NA
9.1%
$3,167.2
1.5x
18.2x
15.9x
3.81x
19.5%
9.6%
19.6%
22.7%
21.5%
$1,215.9
1.8x
15.5x
16.2x
2.21x
13.8%
6.1%
14.1%
30.0%
17.2%
$793.5
1.4x
15.3x
15.9x
2.21x
19.5%
7.9%
15.8%
22.7%
15.6%
William Blair
Alternative Financial Services
Indexed Price / LTM Earnings Ratios as of 10/31/2014
18.0x
Current:
10.2x
15.0x
12.0x
9.0x
6.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Company
Equity
Stock
Market
Price
Ticker 10/31/14 Cap.
Cash America International, Inc.
CSH
$49.15
Debt /
Equity
$1,419.8
0.6x
TBVPS
EPS
LTM
FY2014 LTM
13.9x
11.0x
3.73x
Net Income
Asset
CAGR
ROAA
ROAE
3-Yr CAGR Margin
08'-13'
LTM
LTM
LTM
11.9%
LTM
7.7%
9.5%
(7.9%)
5.5%
13.7%
Enova International, Inc.
ENVA
$28.47
$939.5
3.6x
8.7x
8.4x
NMF
NA
9.9%
57.2%
46.0%
EZCORP, Inc.
EZPW
$11.28
$604.4
0.4x
12.8x
9.7x
1.28x
34.4%
4.8%
5.5%
NA
4.7%
First Cash Financial Services Inc.
FCFS
$59.08
$1,672.4
0.5x
20.5x
20.1x
10.16x
20.0%
12.0%
20.6%
6.5%
11.9%
QC Holdings, Inc.
QCCO
Regional Management Corp.
RM
$1.63
$28.5
0.2x
NMF
NA
0.41x
(5.4%)
7.3%
(13.2%)
NA
(7.5%)
$11.66
$148.3
2.0x
7.7x
9.3x
0.86x
NA
6.2%
12.1%
2.0%
10.4%
Springleaf Holdings, LLC
LEAF
$37.42
$4,297.0
3.1x
7.4x
18.9x
2.04x
(10.3%)
5.0%
33.5%
NMF
33.5%
World Acceptance Corp.
WRLD
$71.66
$686.2
1.9x
7.3x
7.9x
2.27x
10.7%
13.7%
32.7%
3.4%
16.9%
$1,224.5
1.5x
11.2x
12.7x
2.97x
10.2%
8.3%
19.7%
10.0%
10.0%
$812.9
1.3x
8.7x
9.7x
2.04x
11.3%
7.5%
16.3%
3.4%
11.2%
Mean
Median
Credit Card
Indexed Price / LTM Earnings Ratios as of 10/31/2014
30.0x
Current:
18.3x
24.0x
18.0x
12.0x
6.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Company
Alliance Data Systems
Corporation
Equity
Stock
Market
Price
Ticker 10/31/14 Cap.
Debt /
Equity
EPS
LTM
FY2014
Net Income
TBVPS
Asset CAGR ROAA
ROAE
3-Yr CAGR
Margin
LTM
08' - 13'
LTM
LTM
LTM
LTM
ADS
$283.35
$15,733.9
NMF
32.4x
22.8x
NMF
25.0%
5.2%
NMF
23.4%
11.2%
American Express Company AXP
$89.95
$93,069.2
2.9x
16.7x
16.3x
4.63x
4.0%
3.8%
29.1%
6.1%
18.2%
Discover Financial Services
DFS
$63.78
$28,923.0
1.9x
12.1x
12.1x
2.83x
14.7%
3.2%
23.0%
NA
34.9%
MasterCard Incorporated
MA
$83.75
$96,551.6
0.2x
28.9x
27.2x
NMF
17.1%
22.5%
NMF
14.3%
37.4%
$27.02
Synchrony Financial
SYF
Visa Inc.
V
$22,528.3
2.8x
12.3x
9.9x
2.64x
NA
3.1%
30.4%
NA
32.8%
$241.43 $149,195.2
NMF
28.0x
27.0x
NMF
0.6%
13.7%
20.0%
14.2%
42.8%
Mean
$67,666.9
1.9x
21.7x
19.2x
3.36x
12.3%
8.6%
25.6%
14.5%
29.6%
Median
$60,996.1
2.3x
22.4x
19.5x
2.83x
14.7%
4.5%
26.1%
14.3%
33.8%
Specialty Finance Industry Insights
Consumer Specialty Finance 5
William Blair
Mortgage
Indexed Price / LTM Earnings Ratios as of 10/31/2014
30.0x
Current:
12.6x
20.0x
10.0x
0.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Net Income
Company
Equity
Stock
Market
Price
Ticker 10/31/14 Cap.
Ellington Financial LLC
EFC
$22.49
$752.1
1.8x
8.3x
8.4x
0.93x
33.6%
2.0%
10.0%
48.4%
(4.5%)
Heritage Financial Group,
Inc.
HBOS
$21.19
$186.6
1.5x
19.0x
17.6x
1.11x
22.4%
0.6%
6.0%
35.7%
10.3%
Nationstar Mortgage
Holdings Inc.
NSM
$35.12
$3,195.3
NMF
NMF
9.8x
2.83x
NMF
1.1%
13.5%
NMF
11.0%
Ocwen Financial Corp.
OCN
$23.56
$2,964.2
3.8x
17.7x
10.6x
NMF
28.8%
6.1%
11.0%
33.6%
8.6%
PennyMac Mortgage
Investment Trust
PMT
$21.59
$1,600.7
1.8x
7.7x
7.9x
1.01x
NA
5.0%
14.3%
61.8%
50.7%
PHH Corporation
PHH
$23.69
$1,360.7
1.0x
NA
NMF
0.76x
1.4%
(0.9%)
(3.8%)
57.1%
6.4%
Stonegate Mortgage
Corporation
SGM
$14.46
$372.6
4.1x
NA
10.5x
1.28x
NA
(0.6%)
(3.0%)
NA
(3.3%)
Walter Investment
Management Corp.
WAC
$22.72
$856.6
NMF
7.7x
4.4x
1.97x
NMF
(0.3%)
(5.0%)
NA
(4.5%)
Mean
$1,490.3
2.3x
13.2x
10.8x
1.32x
21.5%
1.9%
6.9%
47.3%
11.3%
Median
$1,360.7
1.8x
13.0x
10.1x
1.06x
25.6%
1.1%
10.0%
48.4%
8.6%
Specialty Finance Industry Insights
6 Consumer Specialty Finance
Debt /
Equity
EPS
LTM
FY2014
TBVPS
Asset CAGR ROAA
ROAE
3-Yr CAGR
Margin
LTM
08'-13'
LTM
LTM
LTM
LTM
Commercial
Specialty
Finance
Sector
William Blair
Commercial Specialty Finance
M&A Trends
•
Year-to-date aggregate M&A transaction volume is running meaningfully above the comparable period in 2013, although
disclosed dollar volume is significantly lower over the same period.
•
Approximately 44% of the aggregate deals since 2002 have been completed at above 10.0 times LTM net income, and
approximately 20% have been completed between 1.50 and 3.00 times LTM book value.
•
Transactions less than $50 million were completed at an average of 5.6 times LTM net income, slightly lower than LTM net
income multiples on deals above $50 million.
Historical Transaction Volume
50
40
30
20
10
0
45
39
43
40
Average: 32
42
26
29
28
29
22
2002
2003
2004
2005
2006
2007
2008
2009
72.2%
31
26
18
16
2010
2011
2012
2013
2013
YTD
2014
YTD
Historical Transaction Dollar Volume
($ in millions)
$16,000
$12,000
$8,000
$4,000
$0
Average: $6,328
$15,423
$7,885
$9,126
$11,162
$6,484
$7,802
$5,702
$1,551
2002
2003
2004
2005
2006
2007
LTM Net Income Multiple Breakdown
2008
$2,453
$1,780
$240
2009
2010
2011
2012
(37.4%)
$7,314
$6,197
2013
2013
YTD
$3,878
2014
YTD
LTM Book Value Multiple Breakdown
6.7%
24.0%
Greater than 10.0x
5.0x to 10.0x
Less than 5.0x
44.0%
32.0%
LTM Net Income Multiple by Transaction Size
8.1x
10.0x
9.2x
5.6x
73.3%
LTM Book Value Multiple by Transaction Size
1.50x
1.00x
5.0x
Greater than 3.00x
1.50x to 3.00x
Less than 1.50x
20.0%
1.40x
1.00x
0.99x
0.50x
0.00x
0.0x
<$50mm
$50mm - $100mm
Source: SNL Financial and William Blair’s market analysis.
Note: Year-to-date as of October 31, 2014.
Specialty Finance Industry Insights
7 Commercial Specialty Finance
>$100mm
<$50mm
$50mm - $100mm
>$100mm
William Blair
Select M&A Transactions
Transaction Value /
Announced
Date
Transaction
Value
LTM Net
Income
Sub-Sector
Buyer Name / Target Name
LTM Book
Value
10/31/14
Leasing
General Electric Capital Corporation/ VB Leasing CZ
-
-
-
10/14/14
Commercial Finance
Meta Financial Group, Inc./ AFS/IBEX Financial Services, Inc.
-
-
-
10/13/14
Leasing
General Electric Capital Corporation/ Milestone Aviation Group Limited
$1,775.0
-
-
10/10/14
Leasing
FIMBank Plc/ First Factors S.A.
$5.7
-
-
10/09/14
Commercial Finance
Heritage Commerce Corp/ BVF/CSNK Acquisition Corp.
$22.5
1.7x
0.14x
09/29/14
Commercial Real Estate Walker & Dunlop, Inc./ Johnson Capital Group, Inc.
-
-
-
09/26/14
Leasing
First Midwest Bancorp, Inc./ National Machine Tool Financial Corporation
-
-
-
09/04/14
Commercial Finance
National Commerce Corporation/ CBI Holding Company, LLC
-
-
-
09/03/14
Leasing
Crestmark Bancorp Inc./ TIP Capital's equipment leasing and asset management
business
-
-
-
08/26/14
Commercial Finance
Funding Circle Limited/ LeapPay, Inc.
-
-
-
08/11/14
Leasing
Signature Bancshares, Inc./ Lease Finance Group, Inc.
-
-
-
08/05/14
Commercial Finance
Cargills Bank Ltd./ Capital Alliance Finance PLC
$441.0
-
-
08/04/14
Leasing
Carolina Alliance Bank/ Dave McBride Leasing, LLC
-
-
-
07/11/14
Commercial Finance
Pine Tree Equity Management, L.P./ Celtic Capital Corporation
-
-
-
06/28/14
Commercial Real Estate
Sutherland Asset Management Corporation/ CIT Small Business Lending
Corporation
-
-
-
06/24/14
Leasing
CIT Group Inc./ Direct Capital Corporation
-
-
-
06/10/14
Commercial Finance
Minnwest Corporation/ HiLine Credit Corporation
-
-
-
06/05/14
Commercial Finance
Ares Management, L.P./ Keltic Financial Services, LLC
-
-
-
06/02/14
Leasing
Element Financial Corporation/ PHH Vehicle Management Services Group LLC
$1,402.5
24.2x
3.80x
06/02/14
Commercial Finance
Omega Commercial Finance Corp./ AmericaVest CRE Mortgage Funding Trust, Inc.
$2.0
-
-
05/21/14
Commercial Finance
Independent Holdings, Inc./ Goodman Factors, Inc.
-
-
-
05/15/14
Commercial Finance
National Bancshares, Inc./ Doral Healthcare Finance
-
-
-
05/05/14
Commercial Finance
United Community Banks, Inc./ Business Carolina Inc.
-
-
-
04/22/14
Commercial Real Estate Wood Creek Capital Management, LLC/ Genesis Funding Limited
-
-
-
04/08/14
Commercial Real Estate Northwest Federal Credit Union/ Park Place Equity, LLC
-
-
-
03/31/14
Commercial Finance
FJ Management Inc./ Anchor Funding Services, LLC
-
-
-
03/28/14
Commercial Finance
FBR & Co./ Securities Lending Business
-
-
-
03/14/14
Commercial Finance
Tiger Global Management/ OnDeck
$77.0
-
-
02/28/14
Commercial Finance
Undisclosed Buyer/ KEF France SAS
-
-
-
02/21/14
Leasing
Wells Fargo & Company/ Long Haul Holding Corp.
$152.0
-
-
01/23/14
Leasing
HgCapital/ Accelerate Acquisitions Limited
-
-
-
Specialty Finance Industry Insights
Commercial Specialty Finance 8
William Blair
Public Valuation Update
Business Development Companies (BDCs)
Indexed Price / LTM Earnings Ratios as of 10/31/2014
25.0x
20.0x
Current:
13.3x
15.0x
10.0x
5.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Net Income
Asset
TBVPS CAGR
Company
Equity
Stock
Market Debt /
Price
Equity
Ticker 10/31/14 Cap.
Apollo Investment Corporation
AINV
$8.25
$1,953.1
0.8x
6.9x
9.2x
0.95x
(4.6%)
5.2%
14.4%
NA
68.4%
9.7%
Ares Capital Corporation
ARCC
$15.99
$5,022.6
0.7x
8.3x
10.9x
0.96x
31.2%
4.8%
11.9%
16.8%
60.0%
9.8%
BlackRock Kelso Capital Corporation
BKCC
$8.82
$657.6
0.5x
6.2x
10.5x
0.88x
5.8%
4.1%
15.8%
16.4%
88.1%
9.5%
Capitala Finance Corp.
CPTA
$18.40
$238.7
1.2x
16.4x
10.5x
0.92x
NA
3.8%
5.6%
NA
30.2%
10.2%
10.7%
EPS
LTM
FY2014 LTM
08'-13'
ROAA
ROAE
3-Yr CAGR
Margin
LTM
LTM
LTM
LTM
Dividend
Yield
CM Finance Inc.
CMFN
$12.60
$172.2
0.6x
9.4x
19.7x
0.86x
NA
5.2%
12.5%
NA
72.5%
Fidus Investment Corporation
FDUS
$16.98
$270.5
0.6x
14.0x
10.8x
1.12x
NA
4.9%
7.2%
(1.7%)
38.2%
9.0%
Fifth Street Finance Corp.
FSC
$8.90
$1,356.7
0.8x
11.3x
8.8x
0.92x
47.3%
5.1%
7.9%
55.0%
38.3%
12.4%
13.5%
Full Circle Capital Corporation
FULL
$5.96
$71.2
1.0x
NMF
8.3x
0.96x
NA
4.6%
NA
NA
NMF
Garrison Capital Inc.
GARS
$14.75
$247.2
0.9x
7.9x
11.5x
0.95x
NA
3.6%
12.2%
NA
65.0%
9.5%
Golub Capital BDC, Inc.
GBDC
$17.33
$815.6
1.0x
12.0x
13.9x
1.11x
50.6%
3.8%
9.4%
45.2%
59.7%
7.4%
Harvest Capital Credit Corporation
HCAP
$12.86
$79.7
NA
11.1x
9.5x
0.89x
NA
7.2%
8.0%
NA
57.2%
10.5%
Hercules Technology Growth Capital, Inc.
HTGC
$15.76
$996.9
0.8x
13.3x
13.1x
1.54x
15.0%
5.6%
11.6%
22.5%
53.9%
7.9%
Horizon Technology Finance Corporation
HRZN
$14.09
$135.6
0.6x
17.3x
12.5x
0.98x
NA
5.0%
5.5%
(19.1%)
23.9%
9.8%
KCAP Financial, Inc.
KCAP
$7.63
$280.2
0.7x
10.2x
7.8x
0.98x
(0.4%)
5.9%
9.7%
NMF
47.9%
13.1%
8.1%
Main Street Capital Corporation
MAIN
$31.78
$1,425.7
0.6x
13.4x
14.6x
1.51x
51.5%
5.0%
11.5%
24.1%
73.8%
Medallion Financial Corp.
TAXI
$11.55
$290.6
1.2x
10.4x
11.2x
1.05x
(1.7%)
2.6%
10.8%
14.4%
67.7%
8.3%
Medley Capital Corporation
MCC
$11.62
$682.2
0.6x
8.4x
7.4x
0.92x
NA
6.0%
10.8%
NA
45.4%
12.7%
Monroe Capital Corporation
MRCC
$13.84
$131.7
0.8x
11.0x
9.7x
0.99x
NA
4.8%
NA
NA
44.2%
9.8%
OFS Capital Corporation
OFS
$11.70
$112.7
1.1x
NMF
12.7x
0.84x
NA
3.0%
5.5%
29.6%
37.5%
11.6%
PennantPark Floating Rate Capital Ltd.
PFLT
$14.04
$209.2
0.7x
10.2x
12.9x
0.98x
NA
3.8%
9.7%
NA
67.6%
7.7%
PennantPark Investment Corporation
PNNT
$10.88
$817.0
0.6x
6.6x
9.9x
0.99x
22.4%
4.9%
14.6%
40.9%
75.0%
10.3%
Prospect Capital Corporation
PSEC
$9.58
$3,284.6
0.8x
9.5x
7.5x
0.92x
52.4%
5.5%
9.9%
34.6%
42.9%
14.6%
Saratoga Investment Corp.
SAR
$15.20
$81.8
1.0x
8.1x
7.6x
0.68x
(2.0%)
4.1%
8.5%
(5.2%)
41.0%
5.8%
Solar Capital Ltd.
SLRC
$18.59
$789.4
0.2x
11.1x
11.9x
0.83x
14.4%
3.5%
7.5%
11.9%
58.3%
8.6%
Solar Senior Capital Ltd.
SUNS
$15.12
$174.4
0.4x
13.1x
13.0x
0.86x
NA
3.1%
6.5%
NA
60.9%
9.3%
TCP Capital Corp.
TCPC
$16.89
$716.3
0.4x
10.9x
11.1x
1.09x
16.9%
5.3%
10.8%
33.3%
74.9%
8.5%
THL Credit, Inc.
TCRD
$12.86
$436.0
0.6x
10.2x
9.5x
0.97x
NA
5.2%
9.5%
26.5%
49.6%
10.6%
TICC Capital Corp.
TICC
$8.77
$528.5
0.8x
13.1x
7.7x
0.93x
37.2%
5.3%
7.0%
6.9%
32.7%
13.2%
TPG Specialty Lending, Inc.
TSLX
$16.77
$898.3
0.5x
8.4x
9.1x
1.07x
NA
6.0%
13.2%
NA
63.6%
9.3%
Triangle Capital Corporation
TCAP
$25.36
$817.6
0.7x
15.8x
12.0x
1.52x
30.7%
5.6%
9.2%
(4.0%)
47.6%
8.5%
Mean
$789.8
0.7x
10.9x
10.8x
1.01x
22.9%
4.7%
9.9%
23.5%
54.7%
10.0%
Median
$482.3
0.7x
10.6x
10.7x
0.96x
19.6%
5.0%
9.7%
16.8%
57.2%
9.7%
Specialty Finance Industry Insights
9 Commercial Specialty Finance
William Blair
Commercial Finance
Indexed Price / LTM Earnings Ratios as of 10/31/2014
30.0x
25.0x
Current:
17.0x
20.0x
15.0x
10.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Net Income
Asset
TBVPS CAGR
Company
Equity
Stock
EPS
Market Debt /
Price
Equity LTM FY2014 LTM
Ticker 10/31/14 Cap.
CIT Group Inc.
CIT
$48.80
$8,974.9
3.9x
9.7x
14.8x
1.06x (10.1%)
2.1%
11.0%
NMF
41.9%
NewStar Financial, Inc.
NEWS
$13.68
$655.5
3.0x
NMF
NMF
1.07x
0.3%
0.6%
2.6%
(2.8%)
21.2%
NA
PacWest Bancorp
PACW
$42.66
$4,347.6
3.5x
30.4x
16.7x
2.50x
7.8%
0.9%
4.8%
51.4%
18.1%
2.3%
SVB Financial Group
SIVB
$111.99
08'-13'
ROAA
ROAE
3-Yr CAGR
Margin
LTM
LTM
LTM
LTM
Dividend
Yield
1.2%
$5,691.4
8.0x
20.6x
21.3x
2.09x
21.4%
1.8%
15.8%
19.7%
18.8%
NA
Mean
$4,917.4
4.6x 20.2x
17.6x
1.68x
4.8%
1.4%
8.5%
22.7%
25.0%
1.8%
Median
$5,019.5
3.7x 20.6x
16.7x
1.58x
4.0%
1.4%
7.9%
19.7%
20.0%
1.8%
Commercial Real Estate Lending
Indexed Price / LTM Earnings Ratios as of 10/31/2014
30.0x
Current:
11.8x
25.0x
20.0x
15.0x
10.0x
5.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Company
Stock
Equity
EPS
Price
Market Debt /
Ticker 10/31/14 Cap.
Equity LTM
Ladder Capital Corp
LADR
$18.99
$960.8
2.1x
NMF
Net Income
Asset
TBVPS CAGR
FY2014 LTM
12.8x
1.42x
08'-13'
ROAA
ROAE
3-Yr CAGR Margin
LTM
LTM
LTM
NA
3.3%
8.9%
LTM
NA
Dividend
Yield
21.2%
NA
2.5%
Resource America, Inc.
REXI
$9.54
$188.9
1.5x
NMF
NMF
1.36x
25.0%
1.4%
5.7%
NA
3.5%
Walker & Dunlop, Inc.
WD
$16.11
$525.1
2.6x
11.4x
11.9x
1.48x
43.8%
3.4%
11.6%
63.0%
14.4%
NA
Mean
$558.3 2.1x
11.4x
12.4x
1.42x
34.4%
2.7%
8.7% 63.0%
13.1%
2.5%
Median
$525.1 2.1x
11.4x
12.4x
1.42x
34.4%
3.3%
8.9% 63.0%
14.4%
2.5%
Specialty Finance Industry Insights
Commercial Specialty Finance 10
William Blair
Leasing
Indexed Price / LTM Earnings Ratios as of 10/31/2014
26.0x
Current:
13.5x
21.0x
16.0x
11.0x
6.0x
Oct 2009
Oct 2010
Oct 2011
Oct 2012
Oct 2013
Oct 2014
Public Company Valuations
Stock Price /
Company
Equity
Stock
Market
Price
Ticker 10/31/14 Cap.
AerCap Holdings N.V.
AER
$43.34
AeroCentury Corp.
ACY
Air Lease Corporation
AL
Aircastle LTD
CAI International Inc.
Element Financial Corporation
Debt /
Equity LTM
$9,201.9
4.0x
$11.15
$17.9
3.2x
$36.59
$3,746.2
2.5x
AYR
$19.08
$1,545.6
2.3x
CAP
$21.05
$437.5
2.9x
EFN
$11.61
$3,066.2
2.7x
Asset
TBVPS CAGR
EPS
11.1x
FY2014 LTM
Net Income
ROAA
08'-13' LTM
10.0x
3.19x
11.8%
3.3%
NA
NMF
0.50x
4.5%
NMF
16.0x
15.5x
1.39x
NA
3.8%
20.2x
12.4x
0.93x
8.0%
4.2%
7.7x
8.0x
1.03x
32.3%
3.8%
NMF
24.1x
1.99x
NA
0.1%
ROAE
3-Yr CAGR
Margin
LTM
LTM
LTM
12.0%
Dividend
Yield
52.7%
23.1%
NA
NMF
NA
(22.2%)
NA
9.5%
NA
24.3%
0.3%
4.7%
NMF
10.0%
4.2%
14.6%
7.7%
26.7%
NA
NMF
NA
2.9%
NA
GATX Corp.
GMT
$63.40
$2,840.3
3.1x
14.7x
14.3x
2.25x
4.8%
2.9%
15.1%
26.5%
14.2%
2.1%
Marlin Business Services Corp.
MRLN
$21.14
$273.0
NA
15.3x
13.6x
1.55x
(2.4%)
2.5%
10.9%
47.7%
24.2%
2.4%
3.8%
MicroFinancial Inc.
MFI
$8.39
$121.1
0.9x
12.3x
11.7x
1.30x
10.5%
5.6%
11.0%
6.8%
23.7%
Mobile Mini, Inc.
MINI
$43.83
$2,020.9
0.6x
NMF
NMF
6.06x
(1.4%)
3.8%
5.3%
24.2%
10.1%
1.6%
Ryder System, Inc.
R
$88.47
$4,692.4
2.3x
17.1x
15.8x
3.09x
6.4%
3.9%
15.1%
19.6%
4.1%
1.7%
TAL International Group, Inc.
TAL
$43.13
$1,435.9
4.3x
11.7x
11.4x
2.32x
15.6%
4.7%
18.2%
4.6%
19.5%
6.7%
Textainer Group Holdings Limited
TGH
$34.44
$1,953.2
2.3x
10.2x
11.7x
1.70x
24.6%
4.3%
16.9%
3.3%
34.6%
5.5%
Willis Lease Finance Corp.
WLFC
$22.81
$191.2
3.5x
13.2x
17.3x
0.87x
4.1%
3.4%
6.6%
(1.8%)
8.0%
NA
Mean
$2,253.1 2.5x
13.6x
13.8x
2.01x
9.9%
3.6% 11.7%
26.5%
9.4%
3.1%
Median
$1,749.4 2.6x
13.2x
13.0x
1.63x
7.2%
3.8% 11.5%
13.7%
16.9%
2.4%
Specialty Finance Industry Insights
11 Commercial Specialty Finance
Capital Markets
Transactions
William Blair
Capital Markets Transactions
Recent Equity Offerings
Initial Public Offerings
Market Cap. at Pricing /
Pricing
Date
Company
Price
Shares
Amount
LTM EPS
LTM
Book Value
10/08/14
Eagle Point Credit Company Inc.
$20.00
5.2
$103.1
-
-
07/30/14
Synchrony Financial
$23.00
125.0
$2,875.0
-
-
05/08/14
Alcentra Capital Corporation
$15.00
6.6
$100.0
10.3x
0.90x
04/09/14
Ally Financial Inc.
$25.00
95.0
$2,375.0
-
0.80x
03/20/14
TPG Specialty Lending, Inc.
$16.00
7.0
$112.0
12.4x
1.03x
03/05/14
TriplePoint Venture Growth BDC Corp.
$15.00
8.3
$125.0
-
-
02/05/14
CM Finance Inc.
$15.00
6.7
$100.0
9.1x
1.47x
02/05/14
Ladder Capital Corp
$17.00
13.3
$225.3
-
6.44x
01/22/14
Santander Consumer USA Holdings Inc.
$24.00
75.0
$1,799.8
17.2x
3.10x
01/15/14
American Capital Senior Floating, Ltd.
$15.00
10.0
$150.0
-
-
11/08/13
JGWPT Holdings Inc.
$14.00
13.9
$195.0
-
-
11/06/13
StoneCastle Financial Corp.
$25.00
6.3
$157.1
-
-
10/15/13
Springleaf Holdings, Inc.
$17.00
21.0
$357.8
-
1.12x
10/09/13
Stonegate Mortgage Corporation
$16.00
7.1
$113.6
14.1x
2.48x
10/03/13
Cherry Hill Mortgage Investment Corporation
$20.00
6.5
$130.0
-
-
09/24/13
Capitala Finance Corp.
$20.00
4.0
$80.0
-
-
07/11/13
Fifth Street Senior Floating Rate Corp.
$15.00
6.7
$100.0
-
-
05/08/13
PennyMac Financial Services, Inc.
$18.00
11.1
$200.0
-
-
05/02/13
Harvest Capital Credit Corporation
$15.00
3.4
$51.0
-
-
05/01/13
Ellington Residential Mortgage REIT
$20.00
6.5
$129.0
-
5.75x
03/26/13
Garrison Capital Inc.
$15.00
5.3
$80.0
-
-
03/21/13
Five Oaks Investment Corp.
$15.00
4.0
$60.5
22.2x
3.32x
02/14/13
Orchid Island Capital, Inc.
$15.00
2.4
$35.4
-
-
02/07/13
ZAIS Financial Corp.
$21.25
5.7
$120.1
-
-
12/04/12
WhiteHorse Finance, Inc.
$15.00
6.7
$100.0
-
-
11/07/12
OFS Capital Corporation
$15.00
6.7
$100.0
-
2.35x
11/07/12
Stellus Capital Investment Corporation
$15.00
8.0
$120.0
-
-
10/24/12
Monroe Capital Corporation
$15.00
5.0
$75.0
-
-
Note: Dollar amount and shares amount are in millions and exclude overallotment.
Source: SNL Financial and William Blair’s market analysis.
Specialty Finance Industry Insights
12 Capital Markets Transactions
William Blair
Recent Equity Offerings (cont’d)
Follow-On Offerings
Market Cap. at Pricing /
Pricing
Date
10/27/14
Company
Hannon Armstrong Sustainable Infrastructure Capital, Inc.
10/23/14
New Mountain Finance Corporation
10/07/14
KCAP Financial, Inc.
09/30/14
LTM EPS
-
LTM
Book Value
1.37x
Price
$13.60
Shares
4.0
Amount
$54.4
$14.53
5.0
$72.7
10.0x
$8.02
3.0
$24.1
11.3x
1.12x
Fidus Investment Corporation
$17.00
2.0
$34.0
16.8x
1.29x
09/18/14
Blackstone Mortgage Trust, Inc.
$27.49
8.0
$219.9
21.7x
1.05x
09/05/14
AerCap Holdings N.V.
$47.10
10.2
$479.5
29.4x
1.38x
09/05/14
PennantPark Investment Corporation
$11.63
8.5
$98.9
6.4x
1.14x
09/04/14
Arlington Asset Investment Corp.
$27.61
2.8
$75.9
7.9x
0.87x
09/04/14
NorthStar Realty Finance Corp.
$18.40
45.0
$828.0
-
1.25x
09/03/14
Ellington Financial LLC
$23.92
8.0
$191.4
11.2x
1.24x
09/02/14
Santander Consumer USA Holdings Inc.
$18.68
10.0
$187.7
12.0x
2.14x
08/20/14
Medley Capital Corporation
$13.02
5.0
$65.1
12.9x
1.14x
08/14/14
Fifth Street Senior Floating Rate Corp.
$12.91
22.8
$294.3
-
3.61x
1.95x
1.08x
08/12/14
Newcastle Investment Corp.
$4.32
39.5
$170.6
15.8x
08/12/14
Triangle Capital Corporation
$26.85
4.3
$115.5
11.2x
1.95x
08/05/14
TPG Specialty Lending, Inc.
$18.63
5.0
$93.2
10.5x
1.13x
07/29/14
TCP Capital Corp.
$17.33
5.4
$93.6
10.2x
1.04x
07/17/14
Garrison Capital Inc.
$14.50
2.0
$29.0
7.9x
0.94x
07/16/14
Ares Capital Corporation
$16.63
13.5
$224.5
9.9x
1.07x
07/16/14
Colony Financial, Inc.
$22.14
15.0
$332.1
17.7x
0.85x
07/11/14
Fifth Street Finance Corp.
$9.95
13.3
$131.8
12.8x
1.09x
06/19/14
Five Oaks Investment Corp.
$11.00
3.5
$38.5
-
0.76x
05/13/14
NorthStar Realty Finance Corp.
$15.45
30.0
$463.5
-
2.24x
04/30/14
Apollo Commercial Real Estate Finance, Inc.
$16.35
9.0
$147.2
10.4x
0.88x
04/29/14
ePlus Inc.
$50.00
1.6
$78.7
11.4x
1.51x
04/25/14
New Residential Investment Corp.
$6.10
25.0
$152.5
5.2x
1.00x
04/23/14
Hannon Armstrong Sustainable Infrastructure Capital, Inc.
$13.00
5.0
$65.0
-
1.48x
04/23/14
Medley Capital Corporation
$13.25
6.0
$79.5
15.3x
1.17x
04/09/14
New Mountain Finance Corporation
$14.30
3.5
$50.0
10.5x
1.05x
04/08/14
Main Street Capital Corporation
$31.50
4.0
$126.0
14.0x
1.75x
04/08/14
Starwood Property Trust, Inc.
$22.32
22.0
$491.0
12.2x
1.38x
04/03/14
Western Asset Mortgage Capital Corporation
$14.67
13.0
$190.7
-
1.02x
1.19x
04/02/14
New York Mortgage Trust, Inc.
$7.59
13.0
$98.7
8.8x
04/01/14
Blackstone Mortgage Trust, Inc.
$27.72
8.0
$221.8
-
1.11x
03/26/14
PennyMac Financial Services, Inc.
$16.50
5.6
$91.7
5.3x
0.55x
03/25/14
Arlington Asset Investment Corp.
$27.40
2.8
$75.4
-
3.53x
03/19/14
Orchid Island Capital, Inc.
$12.55
3.2
$40.2
-
2.43x
03/18/14
Golub Capital BDC, Inc.
$18.05
3.5
$63.2
-
3.49x
03/14/14
TICC Capital Corp.
$10.14
6.0
$60.8
-
-
03/11/14
Oxford Lane Capital Corp.
$17.00
2.8
$47.6
18.1x
2.37x
02/27/14
Colony Financial, Inc.
$21.90
13.0
$284.7
23.1x
1.26x
02/25/14
Apollo Investment Corporation
$8.69
12.0
$104.3
-
-
02/20/14
Kayne Anderson MLP Investment Company
$37.05
8.0
$296.4
31.6x
-
02/19/14
Five Oaks Investment Corp.
$11.30
3.0
$33.9
31.2x
1.25x
01/31/14
Medley Capital Corporation
$14.00
6.0
$84.0
-
-
01/29/14
New Mountain Finance Corporation
$14.70
2.3
$34.2
17.5x
2.15x
01/16/14
Orchid Island Capital, Inc.
$12.50
1.8
$22.5
-
-
01/14/14
Full Circle Capital Corporation
$7.13
1.7
$11.8
-
0.85x
Note: Dollar amount and shares amount are in millions and exclude overallotment.
Source: SNL Financial and William Blair’s market analysis.
Specialty Finance Industry Insights
Capital Markets Transactions 13
William Blair
Recent Debt Offerings
Date
Company
Offering Description
10/31/14
Main Street Capital Corporation
4.500% Senior unsecured notes, due Dec 1, 2019
$175.0
12/01/19
10/28/14
Ford Motor Credit Company LLC
2.597% Senior unsecured notes, due Nov 4, 2019
$1,250.0
11/04/19
Amount
Maturity Date
10/28/14
GATX Corporation
2.600% Senior unsecured notes, due Mar 30, 2020
10/23/14
Toyota Motor Credit Corporation
Floating rate series B medium term notes, due Oct 29, 2015
$250.0
03/30/20
$1,250.0
10/29/15
10/02/14
Starwood Property Trust, Inc.
10/01/14
Freddie Mac
3.750% Convertible senior unsecured notes, due Oct 15, 2017
$375.0
10/15/17
1.000% Reference Notes, due July 28, 2017
$500.0
09/25/14
National Rural Utilities Cooperative
Finance Corporation
Floating rate series C senior unsecured medium-term notes, due May 12,
2017
07/28/17
$25.0
05/12/17
09/24/14
AerCap Ireland Capial Limited
5.000% Senior unsecured notes, due Oct 1, 2021
$800.0
10/01/21
09/24/14
Ally Financial Inc.
5.125% Senior unsecured notes, due Sept 30, 2024
$700.0
09/30/24
09/22/14
General Motors Financial Company, Inc.
4.375% Senior unsecured notes, due Sept 25, 2021
$1,250.0
09/25/21
09/16/14
PennantPark Investment Corporation
4.500% Senior unsecured notes, due Oct 1, 2019
$250.0
10/01/19
09/10/14
John Deere Capital Corporation
2.300% Series F senior medium term notes, due Sept 16, 2019
$500.0
09/16/19
09/09/14
Air Lease Corporation
4.250% Senior unsecured notes, due Sept 15, 2024
$500.0
09/15/24
09/08/14
PACCAR Financial Corp.
2.200% Series N medium-term notes, due Sept 15, 2019
$300.0
09/15/19
09/04/14
American Honda Finance Corporation
2.250% Series A unsecured medium-term notes, due Aug 15, 2019
$1,000.0
08/15/19
09/04/14
Fannie Mae
2.625% Benchmark notes, due Sept 6, 2024
$4,500.0
09/06/24
08/13/14
Caterpillar Financial Services Corporation 1.250% Series H medium-term notes, due Aug 18, 2017
08/12/14
American Express Credit Corporation
08/12/14
Apollo Commercial Real Estate Finance,
Inc.
5.500% Convertible senior unsecured notes, due Mar 15, 2019
08/11/14
RAIT Financial Trust
7.125% Senior unsecured notes, due Aug 30, 2019
08/06/14
Synchrony Financial
4.250% Senior unsecured notes, due Aug 15, 2024
$1,250.0
08/15/24
08/04/14
Arbor Realty Trust, Inc.
7.375% Senior unsecured notes, due May 15, 2021
$35.0
05/15/21
07/24/14
Alliance Data Systems Corporation
5.375% Senior unsecured notes, due Aug 1, 2022
$600.0
08/01/22
07/14/14
Full Circle Capital Corporation
8.250% Senior unsecured notes, due June 30, 2020
07/08/14
American Honda Finance Corporation
1.200% Series A medium-term unsecured notes, due July 14, 2017
07/07/14
General Motors Financial Company, Inc.
3.500% Senior unsecured notes, due July 10, 2019
$800.0
07/10/19
06/25/14
CNH Industrial Capital LLC
3.375% Series A senior unsecured notes, due July 15, 2019
$500.0
07/15/19
06/18/14
EZCORP, Inc.
2.125% Senior unsecured cash convertible notes, due June 15, 2019
$200.0
06/15/19
06/12/14
Colony Financial, Inc.
3.875% Convertible senior notes, due Jan 15, 2021
$150.0
01/15/21
06/12/14
TCP Capital Corp.
5.250% Senior unsecured convertible notes, due Dec 15, 2019
$100.0
12/15/19
06/11/14
Capitala Finance Corp.
7.125% Senior unsecured notes, due June 16, 2021
$100.0
06/16/21
06/11/14
General Finance Corporation
8.125% Senior unsecured notes, due July 31, 2021
$63.0
07/31/21
06/10/14
iStar Financial Inc.
5.000% Senior unsecured notes, due July 1, 2019
$770.0
07/01/19
06/09/14
John Deere Capital Corporation
Floating rate series F senior medium-term notes, due Apr 12, 2016
$750.0
04/12/16
06/06/14
DFC Global Corp.
10.500% Senior secured notes, due June 15, 2020
$800.0
06/15/20
06/04/14
TPG Specialty Lending, Inc.
4.500% Senior convertible unsecured notes, due Dec 15, 2019
$100.0
12/15/19
06/03/14
PACCAR Financial Corp.
1.100% Series N medium-term notes, due June 6, 2017
$300.0
06/06/17
06/02/14
American Express Credit Corporation
1.125% Series E senior unsecured medium term notes, due June 5, 2017
$1,650.0
06/05/17
05/28/14
New Mountain Finance Corporation
5.000% Senior unsecured convertible notes, due June 15, 2019
$100.0
06/15/19
05/23/14
Enova International, Inc.
9.750% Senior unsecured notes, due June 1, 2021
$500.0
06/01/21
05/22/14
Caterpillar Financial Services Corporation Floating rate series H medium-term notes, due May 20, 2016
$250.0
05/20/16
05/16/14
National Rural Utilities Cooperative
Finance Corporation
4.023% Secured collateral trust bonds, due Nov 1, 2032
$218.3
11/01/32
05/13/14
Toyota Motor Credit Corporation
1.125% Series B unsecured medium-term notes, due May 16, 2017
$900.0
05/16/17
2.250% Series E senior unsecured medium term notes, due Aug 15, 2019
Note: Dollar amount in millions and excludes overallotment.
Source: SNL Financial and William Blair’s market analysis.
Specialty Finance Industry Insights
14 Capital Markets Transactions
$750.0
08/18/17
$1,500.0
08/15/19
$100.0
03/15/19
$70.0
08/30/19
$12.5
06/30/20
$650.0
07/14/17
William Blair
Recent Preferred Equity Offerings
Date
Company
09/04/14
Invesco Mortgage Capital Inc.
06/17/14
06/12/14
Amount
Call Date
Dividend Rate (%)
$150.0
12/27/24
7.8%
Federal Agricultural Mortgage Corporation
$75.0
07/18/24
6.0%
Colony Financial, Inc.
$75.0
06/19/19
7.5%
06/03/14
Resource Capital Corp.
$110.0
07/30/24
8.6%
05/29/14
Oxford Lane Capital Corp.
$28.0
06/30/17
8.1%
05/21/14
Five Oaks Investment Corp.
$15.0
12/23/18
8.8%
05/13/14
Gladstone Capital Corporation
$55.0
06/30/17
6.8%
05/12/14
NorthStar Realty Finance Corp.
$225.0
05/15/19
8.8%
05/05/14
American Capital Agency Corp.
$175.0
05/08/19
7.8%
03/20/14
Federal Agricultural Mortgage Corporation
6.9%
02/26/14
Element Financial Corporation
12/18/13
Five Oaks Investment Corp.
12/10/13
Element Financial Corporation
11/13/13
Oxford Lane Capital Corp.
07/16/13
Farm Credit Bank of Texas
06/13/13
Oxford Lane Capital Corp.
05/29/13
General Electric Capital Corporation
05/28/13
New York Mortgage Trust, Inc.
05/08/13
Capstead Mortgage Corporation
$75.0
04/17/19
$125.0
06/30/19
6.5%
$20.0
12/23/18
8.8%
$100.0
12/31/18
6.6%
$36.6
06/30/16
7.5%
$300.0
09/15/23
6.8%
$20.0
06/30/16
7.5%
$1,000.0
06/15/23
5.3%
$75.0
06/04/18
7.8%
$150.0
05/13/18
7.5%
05/06/13
Arbor Realty Trust, Inc.
$30.0
05/09/18
7.8%
04/23/13
CYS Investments, Inc.
$200.0
04/30/18
7.5%
04/15/13
CoBank, ACB
$200.0
07/01/18
6.1%
04/11/13
Dynex Capital, Inc.
$50.0
04/30/18
7.6%
04/08/13
MFA Financial, Inc.
$175.0
04/15/18
7.5%
04/03/13
NorthStar Realty Finance Corp.
$175.0
04/10/18
8.5%
03/12/13
iStar Financial Inc.
$175.0
03/15/18
4.5%
02/07/13
ARMOUR Residential REIT, Inc.
$135.0
02/12/18
7.9%
01/29/13
Arbor Realty Trust, Inc.
$35.0
02/01/18
8.3%
01/29/13
MuniMae TE Bond Subsidiary, LLC
$74.0
04/30/28
5.0%
01/14/13
Federal Agricultural Mortgage Corporation
$60.0
01/17/18
5.9%
01/10/13
KKR Financial Holdings LLC
11/19/12
Oxford Lane Capital Corp.
$325.0
01/15/18
7.4%
$15.0
12/31/14
8.5%
10/09/12
Discover Financial Services
$500.0
12/01/17
6.5%
10/03/12
NorthStar Realty Finance Corp.
$125.0
10/11/17
8.9%
09/25/12
Resource Capital Corp.
$25.0
10/02/17
8.3%
09/20/12
AG Mortgage Investment Trust, Inc.
$100.0
09/27/17
8.0%
09/13/12
Apollo Residential Mortgage, Inc.
$150.0
09/20/17
8.0%
09/06/12
Annaly Capital Management, Inc.
$400.0
09/13/17
7.5%
08/16/12
Hatteras Financial Corp.
$250.0
08/27/17
7.6%
07/27/12
CYS Investments, Inc.
$75.0
08/03/17
7.8%
07/27/12
AG Mortgage Investment Trust, Inc.
$45.0
08/03/17
8.3%
07/25/12
Dynex Capital, Inc.
$50.0
07/31/17
8.5%
07/25/12
Apollo Commercial Real Estate Finance, Inc.
$75.0
08/01/17
8.6%
07/24/12
General Electric Capital Corporation
$1,750.0
12/15/22
6.3%
07/19/12
Invesco Mortgage Capital Inc.
$135.0
07/26/17
7.8%
07/10/12
Colony Financial, Inc.
$102.7
03/20/17
8.5%
$63.3
02/07/12
8.3%
07/09/12
NorthStar Realty Finance Corp.
Note: Dollar amount in millions and excludes overallotment.
Source: SNL Financial and William Blair’s market analysis.
Specialty Finance Industry Insights
Capital Markets Transactions 15
William Blair
Financial Services & Technology Analysts and Coverage
Insurance Brokers and Property
and Casualty Insurance
Adam Klauber, CFA
Financial Technology and
Specialty Finance
Robert Napoli
Asset Management and
Financial Technology
Chris Shutler, CFA
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Allstate Corporation (The) (ALL)
American International Group, Inc. (AIG)
AmTrust Financial Services, Inc. (AFSI)
Aon plc (AON)
Argo Group International Holdings. Ltd.
(AGII)
Arthur J. Gallagher & Co. (AJG)
Benefitfocus, Inc. (BNFT)
Brown & Brown, Inc. (BRO)
Chubb Corporation (The) (CB)
CNA Financial Corporation (CNA)
Crawford & Company (CRD.A)
Crawford & Company (CRD.B)
eHealth, Inc. (EHTH)
Erie Indemnity Company (ERIE)
Federated National Holding Company (FNHC)
HCC Insurance Holdings, Inc. (HCC)
Kemper Corporation (KMPR)
Markel Corporation (MKL)
Marsh & McLennan Companies, Inc. (MMC)
National General Holdings Corp. (NGHC)
National Interstate Corporation (NATL)
Navigators Group, Inc. (The) (NAVG)
Progressive Corporation (The) (PGR)
RLI Corp. (RLI)
Travelers Companies, Inc. (The) (TRV)
WebMD Health Corp. (WBMD)
Willis Group Holdings Public Limited
Company (WSH)
Alliance Data Systems Corporation (ADS)
American Express Company (AXP)
Bottomline Technologies, Inc. (EPAY)
CAI International, Inc. (CAP)
Capital One Financial Corporation (COF)
Cardtronics, Inc. (CATM)
Discover Financial Services (DFS)
Encore Capital Group, Inc. (ECPG)
EVERTEC, Inc. (EVTC)
Financial Engines, Inc. (FNGN)
Garrison Capital Inc. (GARS)
Green Dot Corporation (GDOT)
Harvest Capital Credit Corporation (HCAP)
Independence Realty Trust, Inc. (IRT)
Marlin Business Services Corp. (MRLN)
MasterCard Incorporated (MA)
MoneyGram International, Inc. (MGI)
Monroe Capital Corporation (MRCC)
Performant Financial Corporation (PFMT)
PRA Group (PRAA)
QIWI plc (QIWI)
Visa Inc. (V)
WageWorks, Inc. (WAGE)
Western Union Company (The) (WU)
WEX Inc. (WEX)
Specialty Finance Industry Insights
16 Financial Services & Technology Analysts and Coverage
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Affiliated Managers Group, Inc. (AMG)
Artisan Partners Asset Management Inc.
(APAM)
Eaton Vance Corp. (EV)
Envestnet, Inc. (ENV)
Euronet Worldwide, Inc. (EEFT)
Fiserv, Inc. (FISV)
Global Payments, Inc. (GPN)
Heartland Payment Systems, Inc. (HPY)
Higher One Holdings, Inc. (ONE)
Invesco Ltd. (IVZ)
LPL Financial Holdings Inc. (LPLA)
MSCI Inc. (MSCI)
Schwab (The Charles Schwab Corporation)
(SCHW)
SS&C Technologies Holdings, Inc. (SSNC)
T. Rowe Price Group, Inc. (TROW)
TD Ameritrade Holding Corporation (AMTD)
Vantiv, Inc. (VNTV)
Waddell & Reed Financial, Inc. (WDR)
WisdomTree Investments, Inc. (WETF)
William Blair
Investment Banking Team Biographies
William Blair & Company Financial Services Investment Banking
Robert Metzger, Managing Director and Head of Financial Services Investment Banking, joined William Blair in 1999. While at William
Blair and in his prior position at ABN AMRO, he focused on the corporate finance needs of insurance, financial technology, and
specialty finance companies. Mr. Metzger graduated in 1989 with highest honors from the University of Illinois, receiving a B.S. in
accountancy. In 1995, he graduated with distinction from Northwestern University’s J.L. Kellogg Graduate School of Management,
receiving an M.B.A. in finance and strategy. He is a Certified Public Accountant.
rmetzger@williamblair.com
+1 312 364 8517
J.P. Young, Director, is a member of the financial services industry group, where he focuses on the corporate finance needs of banks,
broker-dealers, and specialty finance companies. Mr. Young joined William Blair’s investment banking group in 2009 from Macquarie
Capital and began his investment banking career in 2000 at Piper Jaffray. He has extensive experience providing M&A advisory
services and raising public and private-equity capital for clients. Mr. Young received a B.S. from Lehigh University and an M.S. from the
University of Chicago.
jyoung@williamblair.com
+1 312 364 8160
Kegan Greene, Vice President, joined William Blair in 2010. Before joining William Blair, Mr. Greene worked at Babcock & Brown,
Goldman Sachs, and Deloitte’s transaction services department. He holds an M.B.A. in finance and entrepreneurship from the
University of Chicago, a J.D. from DePaul University, and a B.A. in English from DePauw University.
kgreene@williamblair.com
+1 312 364 8113
Specialty Finance Industry Insights
Investment Banking Team Biographies 17
William Blair
Select William Blair Transactions
$70,000,000
$100,000,000
$29,000,000
$76,475,000
$1,285,000,000
has been acquired by
Senior Notes
Senior Unsecured Notes
$60,000,000
Follow-on Offering
Follow-on Offering
Portfolio Recovery
Associates
$161,000,000
$66,815,000
Not Disclosed
Not Disclosed
has been acquired by
Milestone Partners
$100,000,000
NORTH STATE ACCEPTANCE
has been recapitalized by
Follow-on Offering
Pine Tree Equity
Management
Senior Credit Facility
Debt Placement
$50,000,000
$34,000,000
$287,500,000
$75,000,000
Persian Acceptance
Corporation
Follow-on Offering
Initial Public Offering
Convertible Senior,
Unsecured Notes
Follow-on Offering
$18,750,000
$438,600,000
£525,000,000
$42,000,000
$78,000,000
has been acquired by
has been acquired by
Baby Bond Offering
Follow-on Offering
Convertible Bond Offering
Debt Placement
Not Disclosed
has acquired
Junior Unsecured
Notes
$92,000,010
$97,980,000
$35,000,000
$75,000,000
$125,000,000
$230,000,000
Initial Public Offering
Follow-on Offering
Senior Subordinated Notes
Preferred Equity
Initial Public Offering
Senior Secured Credit
Facility
Convertible Offering
$74,000,000
$30,000,000
$102,212,920
$75,469,000
188,893,000
Senior Credit Facility &
Subordinated Notes
Second Lien Loan
Initial Public Offering
Follow-on Offering
Follow-on Offering
$34,875,000
$143,750,000
Follow-on Offering
August 2008
Initial Public Offering
$228,433,000
$15,000,000
CFSI
COLLINS FINANCIAL SERVICES, INC.
INNOVATION
Follow-on Offering
COMPLIANCE
INTEGRITY
Second Lien
Term Loan
Specialty Finance Industry Insights
18 Select William Blair Transactions
£28,000,000
has sold a
minority stake to
Investcorp
William Blair
Disclosures
William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair & Company, L.L.C., is a Delaware company and is regulated by the Securities and
Exchange Commission, The Financial Industry Regulatory Authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Conduct Authority
("FCA") in the United Kingdom. William Blair & Company® only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or
institutions situated within the United States and are not offered to persons or institutions outside of the United States.
This material has been approved for distribution in the United Kingdom by William Blair International Limited, Regulated by the Financial Conduct Authority (FCA), and is directed only at, and is only
made available to, persons falling within COB 3.5 and 3.6 of the FCA Handbook (being “Eligible Counterparties” and Professional Clients). This Document is not to be distributed or passed on to any
“Retail Clients.” No persons other than persons to whom this document is directed should rely on it or its contents or use it as the basis to make an investment decision.
William Blair & Company | 222 West Adams Street | Chicago, Illinois 60606 | +1 312 236 1600 | williamblair.com
December 2, 2014
Specialty Finance Industry Insights
Disclosures 19
About William Blair
Investment Banking
William Blair’s investment banking group combines signi icant transaction experience,
rich industry knowledge, and deep relationships to deliver successful advisory and
inancing solutions to our global base of corporate clients. We serve both publicly traded
and privately held companies, executing mergers and acquisitions, growth inancing,
inancial restructuring, and general advisory projects. This comprehensive suite of
services allows us to be a long-term partner to our clients as they grow and evolve. From
2010 - 2013, the investment banking group completed 250 merger-and-acquisition
transactions worth more than $52 billion in value, involving parties in 27 countries and
four continents, was an underwriter on over 20% of all U.S. initial public offerings and
arranged more than $11.5 billion of debt inancing.