Capital One (COF) Affirms $9B Acquisition of ING's (ING) Direct Business
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Capital One Financial Corporation (NYSE: COF) entered a definitive agreement nder which Capital One will acquire ING Direct from ING Groep (NYSE: ING) in a stock and cash transaction valued at $9.0 billion.
Under the agreement, Capital One will purchase ING Direct from ING Groep for $6.2 billion in cash and approximately 55.9 million Capital One shares, valued at $2.8 billion, based on a Capital One share price of $50.07, the 10-day average of Capital One closing prices for the period ending June 15, 2011.
Capital One expects this transaction will be accretive to tangible book value at closing, accretive to EPS in 2012 and result in mid-single digit accretion in 2013.
Capital One expects to finance the cash portion of the consideration, in part, through a public equity raise of approximately $2 billion and debt offerings of approximately $3.7 billion prior to the close of the transaction.
In connection with ING Groep's 9.9 percent pro forma ownership stake in Capital One, ING Groep will have the right to name one member to the company's Board of Directors and has agreed to a customary lock-up on its shares. The transaction is subject to customary regulatory approvals, including banking approvals in both the U.S. and The Netherlands, and is expected to close in late 2011 or early in 2012.
Morgan Stanley, Barclays Capital and Centerview Partners LLC acted as financial advisers to Capital One and Wachtell, Lipton, Rosen and Katz, Mayer Brown and Loyens & Loeff acted as legal advisers.
Under the agreement, Capital One will purchase ING Direct from ING Groep for $6.2 billion in cash and approximately 55.9 million Capital One shares, valued at $2.8 billion, based on a Capital One share price of $50.07, the 10-day average of Capital One closing prices for the period ending June 15, 2011.
Capital One expects this transaction will be accretive to tangible book value at closing, accretive to EPS in 2012 and result in mid-single digit accretion in 2013.
Capital One expects to finance the cash portion of the consideration, in part, through a public equity raise of approximately $2 billion and debt offerings of approximately $3.7 billion prior to the close of the transaction.
In connection with ING Groep's 9.9 percent pro forma ownership stake in Capital One, ING Groep will have the right to name one member to the company's Board of Directors and has agreed to a customary lock-up on its shares. The transaction is subject to customary regulatory approvals, including banking approvals in both the U.S. and The Netherlands, and is expected to close in late 2011 or early in 2012.
Morgan Stanley, Barclays Capital and Centerview Partners LLC acted as financial advisers to Capital One and Wachtell, Lipton, Rosen and Katz, Mayer Brown and Loyens & Loeff acted as legal advisers.
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