CIT Group, a supplier of business loaning and renting administrations, declared Tuesday that it plans to purchase Pasadena-based Onewest Bank, paying $3.4 billion in cash and stock to its hedge fund and private equity owners. IMB Holdco LLC, OneWest's parent company, runs 73 retail branches in Southern California. The $3.4 billion cash and-stock arrangement will equip IMB shareholders with $2 billion in cash and 31.3 million CIT Group shared which are right now valued at $1.4 billion.
Onewest is a private bank, established in 2009 with about $23 billion in holdings, which also includes business and private home loan as well as $15 billion in deposits. It has local branches in Pasadena, San Marino, Hastings Ranch, Arcadia, Monterey Park, Glendale, Bradbury-Duarte, Los Angeles, Burbank, Commerce and La Brea. Following the deal, Onewest is said to merge with CIT Group's banking subsidiary CIT Bank and all its branches will work under the CIT Bank sign. CIT has 3,200 employees and Onewest has 2,160. CIT has not yet revealed on whether some jobs may be wiped off as result of the merger.
CIT Group’s board will now expand from a seat of 13 directors to 15 directors. It will additionally create a commercial bank with $67 billion in assets and $28 billion in deposits.
“This transformational transaction will combine CIT’s national middle-market lending platform with OneWest’s wholesale lending and branch banking franchise to create a unique provider of retail and institutional financial services. We look forward to welcoming OneWest Bank’s talented employees to CIT as we build our franchise and meet the financing needs of our customers.”
John A. Thain, CIT Group’s chairman and CEO, said in a statement.
CIT Group’s CEO John Thain remarked that securing the acquisition will help them expand across a hoard of business and also reduce the expense of CIT's stores while additionally growing its portfolio of financial products. IMB Holdco Chairman Steven T. Mnuchin will join CIT Group as vice chairman, and will likewise be one of the members of its board of directors. Alan Frank, OneWest’s independent director is also said to join the board of the merged group.
“We are confident that this transaction will provide our retail and commercial customers with access to the broad range of high-quality financial products and services offered by CIT, and allow OneWest to benefit from CIT’s expansive client base and global reach,” Mnuchin said.