FIRSTPLUS Financial announces proposed acquisition of The Modern Finance Company.
Under the terms of the agreement, FIRSTPLUS Financial will issue common stock in exchange for all of the outstanding shares of Modern Finance. The transaction will be accounted for as a pooling of interests.
The Modern Finance Company, based in Columbus, Ohio, was founded in 1924 and is in its third generation of management. It is an originator of small consumer finance loans, retail installment contracts, and second-lien equity loans. At December 31, 1996, Modern Finance had total assets of $27.3 million. The Company's net earnings from continuing operations for the twelve months ended December 31, 1996 totaled $738 thousand. Modern Finance operates from seven branches located throughout central Ohio as well as a centralized processing center located in its home office building.
Daniel T. Phillips, FIRSTPLUS Financial's Chief Executive Officer, commented, "Ohio has a very large market for consumer finance and a significant amount of the population could be either a potential FIRSTPLUS consumer finance or real estate customer. We believe that with seven offices near Columbus, and expansion plans for other major markets in Ohio and neighboring states, The Modern Finance Company provides us with tremendous access to this customer base."
Earl W. Osborne, President of The Modern Finance Company, said, "We are very excited to be working with FIRSTPLUS Financial. We anticipate operational benefits inherent in the talented management team at FIRSTPLUS, their cutting-edge technology and excellent marketing approach."
Chuck Owens, President of FIRSTPLUS's consumer finance division, added, "Earl and his team have excellent experience in the consumer finance market. The current Modern Finance management and employees will remain in place and we will quickly expand their responsibilities to include originating our high LTV core product as well as growing the traditional Modern Finance consumer loan business."
FIRSTPLUS Financial Group, formerly RAC Financial Group, is a specialized consumer finance company that, through its subsidiaries, originates, purchases, services and securitizes consumer finance receivables, primarily home improvement loans, all secured by liens on the borrower's home. FIRSTPLUS, headquartered in Dallas, has regional offices in Denver, Colorado; Holly Springs, Mississippi and Columbia, South Carolina, and a network of origination branches nationwide.
CONTACT: RAC Financial Group, Inc.
Daniel T. Phillips
Eric C. Green
Michele Katz/Geoffrey Buscher/Jason Langer
Press: Brian Maddox/Estelle Bieber