Capital One to Acquire HFS Group; A Leading Home Equity Loan Broker in the United Kingdom.MCLEAN, Va. -- Capital One Financial Corporation (NYSE NYSE See: New York Stock Exchange :COF) today announced a definitive agreement under which Capital One will acquire HFS (Hierarchical File System) The file system used in the Macintosh. The first version, known as "Mac OS Standard," was introduced in 1985. HFS+, an enhanced version, came out in 1998 in preparation for the upcoming Mac OS X operating system. Group, one of the United Kingdom's leading home equity loan brokers for $117 million (GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 65 million) in an all-cash transaction. This consideration includes repayment of $47 million (GBP 26 million) of HFS Group's debt. HFS Group, a privately held company privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. , primarily originates home equity loans for individuals utilizing its relationships with a network of lenders. In the year ending March 31, 2004, HFS originated a volume of approximately 15,000 loans, with a value of approximately $630 million (GBP 350 million). The transaction will broaden Capital One's presence in the U.K., where it has almost four million customers and is one of the country's largest providers of credit cards. HFS is one of the U.K.'s leading independent brokers of home equity and other secured loans. "This transaction aligns with Capital One's strategy of diversifying through carefully targeted acquisitions that provide new product lines, build on our successful consumer-lending platforms, and create value for our shareholders," said Richard D. Fairbank, Chairman and Chief Executive Officer of Capital One. HFS will continue to operate as a distinct business with its current senior management team. Paul Naden, Managing Director of HFS's senior management team, will report to Fergus Brownlee, Executive Vice President, Capital One Europe. Naden said, "This is the right step for everyone with a stake in HFS Group. We are all looking forward to taking our business to the next level of success as an important part of Capital One's growing U.K. business. This transaction allows us to realize a myriad of benefits, such as Capital One's direct marketing expertise." "We expect to generate significant top-line synergies by taking advantage of HFS Group's rapidly growing position in the home equity loan market, highly-skilled management, and solid record of success," said Larry Klane, Capital One's Executive Vice President, Global Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. . Under the terms of the agreement, HFS Group's owners and loan note holders will receive $117 million (GBP 65 million) in cash. HFS will become a subsidiary of Capital One Bank Europe, plc (COBEP). The transaction, which has been approved by the boards of directors of both companies, is subject to approval by the U.K. Financial Services Authority The Financial Services Authority ("FSA") is an independent non-departmental public body and quasi-judicial body that regulates the financial services industry in the United Kingdom. Its main office is based in Canary Wharf, London, with another office in Edinburgh. and is expected to close early in the first quarter of 2005. The transaction, including the associated integration costs, is not expected to have a material effect on Capital One's earnings. The company cautions that current expectations in this release for earnings, synergies and strategy are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and actual results could differ materially from current expectations due to a number of factors, including competition in the home equity loan business, the company's ability to integrate operational and strategic platforms, and general economic conditions affecting consumer income and spending, which may affect consumer bankruptcies, defaults, and charge-offs. A discussion of these and other factors can be found in Capital One's annual reports and other reports filed with the Securities and Exchange Commission, including, but not limited to, Capital One's report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2003. About Capital One Headquartered in McLean, Virginia McLean is an unincorporated community located in Fairfax County in Northern Virginia. A small geographic area along Chain Bridge Road in Arlington County has a 22101 zip code and is also part of McLean. , Capital One Financial Corporation (www.capitalone.com) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. products and Capital One Auto Finance, Inc., offers automobile and other motor vehicle financing products. Capital One's subsidiaries collectively had 47.2 million accounts and $75.5 billion in managed loans outstanding as of September 30, 2004. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "COF" and is included in the S&P 500 index. About HFS Group Founded in 1969 HFS has grown from a small company employing 24 staff, to a group with over 480 staff. In the year ending March 31, 2004, HFS originated a volume of approximately 15,000 loans, with a value of approximately $630 million (GBP 350 million). UK based HFS (Macclesfield, Cheshire) is one of the country's leading independent brokers, providing services for secured and unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. lending, mortgages, insurance and investment products. It works with a network of major lenders and insurance providers to offer the best possible financial deals for its customers. (www.hfsgroup.co.uk) |
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