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Peoples Bank to Acquire Vantage Financial

February 17, 2022, 08:04 AM
Filed Under: Equipment Finance News

Peoples Bancorp Inc. announced its wholly owned subsidiary, Peoples Bank, has entered into a definitive agreement to acquire Vantage Financial, LLC, a nationwide provider of equipment financing headquartered in Excelsior, MN. Under the terms of the agreement, Peoples Bank will purchase 100 percent of the equity of Vantage for total cash consideration of $54 million. Peoples Bank will also repay approximately $21 million in recourse debt on behalf of Vantage. Vantage offers mid-ticket equipment leases primarily for business essential information technology equipment across a wide array of industries and had lease assets of approximately $147 million as of Dec. 31, 2021.

Upon completion of the transaction, Vantage will become a subsidiary of Peoples Bank. The substantial majority of Vantage's current leadership and associates are expected to continue in their positions, led by Vantage co-founder and CEO, William Foudray. Vantage co-founder and Chairman Bob Murphy plans to retire in March and will not remain with the company. As a subsidiary, Vantage will continue to operate under the name Vantage Financial, which will leverage Vantage's strong brand recognition within the equipment finance industry. The closing of the transaction is subject to customary closing conditions and is expected to occur in March.

As a result of funding synergies, the transaction is expected to be 3 percent accretive to Peoples' earnings per share in 2022 and over 6 percent accretive to 2023 earnings per share. In addition, the transaction will result in approximately 8 percent tangible book value dilution with a projected earn-back of less than four years.

"We are excited to welcome Bill and his highly talented team to Peoples and look forward to Vantage continuing its impressive track record of originating high quality assets," said Chuck Sulerzyski, President and Chief Executive Officer of Peoples.  "The addition of Vantage to the Peoples suite of product offerings will allow us to build upon our recent success with our North Star Leasing acquisition, while also becoming a top 100 U.S. leasing business based on combined assets."

"My team and I are thrilled with the opportunity to partner with Chuck and the Peoples team. We believe that the combination of our intense focus on achieving above average risk-adjusted returns along with Peoples' balance sheet will enable Vantage to accelerate on its track record of profitable growth," Foudray said. "We look forward to closing the transaction and becoming part of the Peoples team. The increased capabilities and resources for Vantage will benefit our clients, business partners, and employees. Last, we want to thank Bob Murphy for his leadership and many contributions over the years since the two of us founded Vantage in 2011. We wish him all the best in his retirement."  

Vantage's lease originations have grown by an average of 25 percent annually from 2016 to 2021. Vantage's portfolio generated an approximate yield of 6 percent in 2021, and the net investment of approximately $147 million at Dec. 31, 2021, was comprised of over 1,000 leases with an average amount financed at origination of approximately $260,000.

Peoples was advised by Hovde Group, LLC and the law firm of Squire Patton Boggs (US) LLP. Vantage and its equity owners were advised by Cherry Tree & Associates, LLC and the law firm of Barack Ferrazzano Kirschbaum & Nagelberg LLP.

Vantage is a national lessor of equipment to middle market companies in a variety of industries throughout the United States. Vantage provides its clients with value-added technology leasing solutions based on long-term client and partner relationships built on exceptional service, creativity, and integrity. More specifically, Vantage provide its clients with flexible solutions for the utilization of technology equipment. Headquartered in Excelsior, MN, Vantage has regional offices located around the country to better serve their customers including Guilford CT, Holmdel, NJ, Santa Barbara, CA, Austin and Houston, TX, and Milwaukee, WI. Vantage Financial has been in business since 2011.

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