Jan 4, 2018

Private equity buys into subprime lender OneMain

Dan Primack

Private equity firms Apollo Global Management and Värde Partners have agreed to acquire a 40.5% stake in OneMain Financial, the Indiana-based subprime lender spun off by Citigroup after the financial crisis, from Fortress Investment Group. No financial terms were disclosed, but earlier press reports suggested a sale price of between $1.5 billion and $2 billion.

Why it matters: OneMain is one of the shadow banking world's biggest players, having provided auto and other sorts of personal loans to millions of customers through more than 1,600 branches in 44 states.

Deal context: OneMain had initially sought a buyer for the entire company, but didn't find adequate takers. This deal provides an exit for Fortress, which perhaps was looking to shed some assets tied to its own acquisition by SoftBank (which closed last week).

Bottom line: "For Apollo, the deal represents a way to own a big chunk of OneMain without engaging in a full leveraged buyout, given that the company is already saddled with more than $14 billion in long-term debt." — Greg Roumeliotis, Reuters

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Private equity buys into subprime lender OneMain

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