CIT Group Inc.
) announced that it has successfully completed the acquisition of
Portsmouth, NH-based Direct Capital Corporation. The company
executed this acquisition through its subsidiary CIT Bank.
With the closure of this strategic deal, CIT Group looks ahead to
the development of its small business as well as mid-sized market
lending and leasing potential. Also, the company believes that this
collaboration will give it a competitive edge in the market and
Earlier in June, CIT Group revealed its plan to acquire Direct
Capital though the terms and conditions of the transaction were not
divulged. As per the deal, Christopher J. Broom, Co-founder and
Chairman of Direct Capital and James P. Broom, Chief Executive
Officer of Direct Capital were to continue to head the business.
Direct Capital, with assets worth $500 million, has served as a
lender for over 80,000 customers offering about $2.25 billion for
their business requirements. Hence, the agreement is expected to
enhance CIT Group's existing portfolio as well as increase its
current client base.
The acquisition is also expected to benefit customers of Direct
Capital providing them access to CIT Group's enhanced services and
wide range of products.
CIT Group's Other Endeavors
Along with the second-quarter 2014 earnings release in July, CIT
Group announced a definitive agreement to merge with IMB Holdco
LLC, the parent company of OneWest Bank N.A. The cash/stock deal is
valued at $3.4 billion and requires regulatory approvals and is
subject to customary closing conditions.
Also, earlier this year, CIT Group acquired Nacco SAS - a premier
full-service wagon leasing company headquartered in Paris.
CIT Group has been consistently trying to regain its foothold in
the market. The company's efforts are well reflected in its
better-than-expected second-quarter results and its continuous
involvement in diversification activities. In fact, the turnaround
in investors' sentiments following the results also signals that
the company's efforts are paying off.
However, dawdling growth in the industries where CIT Group provides
finance, rigorous regulations and feeble economic recovery could
hamper the company's development going forward.
Currently, CIT Group carries a Zacks Rank #3 (Hold). Some
better-ranked miscellaneous services companies include FleetCor
Technologies, Inc. (
), Euronet Worldwide Inc. (
) and Ladder Capital Corp (
). All these stocks hold a Zacks Rank #2 (Buy).
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