San Francisco-based Union Bank - a unit of UnionBanCal Corp. -
closed the acquisition of Atlanta-based Smartstreet. Prior to the
completion of the acquisition, Smartstreet was a financial
services division of
PNC Financial Services Group Inc.
). UnionBanCal Corp. is a fully owned subsidiary of
Mitsubishi UFJ Financial Group, Inc.
), also known as MUFG.
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The financial terms of the agreement were undisclosed. However,
market rumors indicate the purchase price to be roughly $126
million. Smartstreet will retain its brand in the markets and
work with its existing executive team, operating as a unit of
Smartstreet, a provider of banking services to homeowners
associations and community association management companies
worldwide, became a part of PNC Financial in March 2012, at the
time of purchase of RBC Bank (USA), the U.S. retail banking
Royal Bank of Canada
This financial services division is also a leader in community
associations banking services with deposit base worth $1 billion
and provides services such as banking and account management,
payment processing and lockbox services, association loans and
lines of credit, credit card services as well as website hosting
Union Bank is a leader in providing banking services to
homeowners' associations in the West Coast.
The completion of the transaction combines Smartstreet and Union
Bank's banking services and would help serving the widespread
client portfolio across the United States. The combined entity
would ensure the offering of a wide and improved array of
products, which will lead to industry-wide growth.
Further, Smartstreet's healthy base of core deposits will provide
short term as well as long-term benefits to Union Bank.
Smartstreet's extensive and well known
Homeowner Association (HOA) banking franchise as well as the
combined strengths of both of these companies in comprehensive
receivables and national lockbox processing will also be
Moreover, the acquisition of Smartstreet would brighten Union
Bank's prospects of becoming the industry leader in providing
banking services to management companies. We believe the
acquisition will improve the revenues of Union Bank's Global
Treasury Management unit as well.
MUFG retains a Zacks #3 Rank, which translates into a short-term
Hold rating. Considering the fundamentals, we also maintain our
long-term Neutral recommendation on the stock.