By: Equipment Finance Advisor Staff Writer
Date: Jul 26, 2017 @ 07:00 AM
On July 19, People’s United Financial, Inc. announced it had signed an agreement to acquire LEAF Commercial Capital – a Philadelphia-based equipment finance company and early adopter of innovative financing automation technology. Under the terms of the agreement, People’s United – which began life 175 years ago as a small savings bank in Bridgeport, Connecticut – will acquire approximately $730 million of LEAF’s net investment in leases and loans, and retain approximately $250 million of its securitizations. Operating as a subsidiary of People’s United, LEAF will continue under its own brand and leadership to serve equipment leasing and finance markets distinct from, but complementary to, those served by People’s United. The deal is set to close in the third quarter of 2017.
To learn more about what led to the merger of these two Northeast financial institutions, Equipment Finance Advisor spoke with Jack Barnes, President and CEO of People’s United Bank, and Crit DeMent, CEO of LEAF Commercial Capital, to get their thoughts on the acquisition and insights into how it will foster growth in years to come.
Equipment Finance Advisor: What prompted People’s United Bank to pursue this acquisition?
Jack Barnes: LEAF is one of the largest independent commercial equipment finance companies in the U.S. and will be a complementary expansion of our existing specialty finance businesses. Currently, we serve our customers via two subsidiaries: People’s Capital and Leasing Corporation, and People’s United Equipment Finance Corp. For People’s United, LEAF represents a compelling opportunity to leverage an established platform with an experienced and proven management team. People’s United chose LEAF for many reasons, including its business philosophy and corporate culture, pristine portfolio, business automation platform, and strong brand identity in the marketplace.
To date, LEAF has financed over $5.8 billion for more than 243,000 customers nationwide. Adding that business and those markets to our own portfolio is an attractive benefit on its own. But add to that LEAF’s highly scalable commercial lending platform, attractive risk-adjusted returns, and experienced, talented people working throughout the organization, and you have an ideal fit for what People’s United aims to achieve in the equipment leasing and finance space.
Crit DeMent: In our ongoing push to grow LEAF’s business, we continually seek opportunities that allow us to extend our reach, expand our services, and improve our access to capital. People’s United is a strong, stable, and growing nationally chartered lender that closely aligns with LEAF’s culture and values, so it presents an ideal match that allows us to achieve all those goals.
LEAF’s acquisition by People’s United significantly strengthens our access to capital, while allowing us to maintain the independent spirit, agility, and business philosophies that have made us one of the nation’s leading independent equipment leasing and finance companies. As part of People’s United Bank, LEAF can continue to serve the markets we know well, to the standard we’re known for, while accelerating our growth in existing and new markets. After extensive discussions, we both realized that LEAF’s acquisition by People’s United was quite clearly the next logical step forward for both of our companies.
Equipment Finance Advisor: How does the decision that LEAF will continue to operate under its own brand and current leadership following the acquisition figure into your strategic plans?
Barnes: For People’s United Bank, LEAF’s value goes well beyond the fact that it provides us entry into complementary equipment financing markets. With LEAF, we’re acquiring a dynamic organization built on a cutting-edge financing platform, leading automation, strong brand identity, and outstanding people. We believe LEAF will generate the greatest value for People’s United with its independent spirit, leadership, team, and business philosophies left intact.
DeMent: We think it’s important to preserve the unique attributes that make LEAF so effective in the markets it serves. While LEAF will be fully integrated with People’s United Bank, we’ll also be empowered and encouraged to pursue our growth strategy as we have been, executed by the team whose talents and capabilities helped to inspire it.
Equipment Finance Advisor: Tell us more about the effect of this acquisition on your existing teams.
Barnes: The strength of our combined leasing and equipment finance expertise will provide an exceptional customer experience. People’s United and LEAF share many core similarities in that we are both highly regarded in the industry, have a customer-centric approach to the business and value the focus and commitment of our employees.
DeMent: Additional opportunities made possible by this change will expand growth opportunities for our current team, as well as create new positions so that as we grow we can continue to provide our vendor partners and business customers the exceptional service they’ve come to expect.
Equipment Finance Advisor: How will this move affect your current market focus?
Barnes: As mentioned before, the equipment leasing and finance markets currently served by People’s United Bank and LEAF reinforce each other well, without a lot of overlap. While we certainly anticipate entry into new markets and expansion of existing ones, we intend to maintain this balance and support LEAF’s growth objectives.
DeMent: We’re adding strength to strength with this acquisition, so it just makes sense to continue serving our distinct markets and leveraging the expertise, experience, branding, and reputation we’ve spent years developing independently and will now continue to build on as united businesses. As Jack said, we anticipate a lot of growth potential, and we think the most effective way to pursue those opportunities is together.
Read the original article from the Equipment Finance Advisor here.