Navient Closes Earnest Acquisition To Enforce Digitization
Zacks Investment Research | Nov 05, 2017 08:55PM ET
Navient Corporation (NASDAQ:NAVI) , headquartered at Wilmington, completed the cash-acquisition deal with San Francisco-based Earnest, a financial technology company, under which the former acquired the latter. In this era of digitization, the combined entity will serve consumer-centric education credit products. Notably, this deal was announced in early October for a total value of $155 million.
On completion, Navient has taken over education refinancing loans over $500 million. Earnest is a financial technology and education-finance company serving consumers unable to get finance from traditional banks. Initiated in 2013, the company is likely to serve with loans worth $1 billion in student loan refinancing loans in 2017.
Terms of the Deal
Per the deal, the remaining share-repurchase program of Navient will be suspended till the end of 2018, though the annual dividend of 64 cents remains in place. Notably, the capital will be invested toward growth of the education-lending business and building book value.
Notably, the brand — Earnest — would continue as before, headed by its current management team. In addition, its clients will be served with the same rates, terms and benefits they are entitled to.
Bottom Line
We believe the latest acquisition is a befitting one that will likely support Navient’s future prospects, which faces potential threat from lack of access to new loans and alternative sources of revenues. The company’s focus on tapping growth opportunities is anticipated to boost its overall business performance. Further, a gradually improving economy and declining unemployment rate are anticipated to provide support to the company.
Notably, the company's share price lost nearly 17.1% over the last six months, as compared with 14.8% growth recorded by the Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.