NEW YORK — CIT Commercial Services, already the nation’s largest factor, rang in the new year by gobbling up yet another competitor in the consolidating factoring industry.
This story first appeared in the January 5, 2004 issue of WWD. Subscribe Today.
The company, a division of Livingston, N.J.-based CIT Group Inc., said on New Year’s Eve day that it had fully acquired HSBC Bank’s domestic factoring assets, valued at about $1 billion before accounting for assumed liabilities. Net assets acquired totaled approximately $270 million, the firm said. Further terms of the acquisition were not disclosed.
“This transaction reflects CIT’s corporate strategy to pursue growth opportunities that are synergistic with our core business lines and meet our return on equity targets,” CIT chief operating officer Jeffrey Peek said in a statement.
HSBC and Capital Factors have been the subject of acquisition rumors for several months. Buzz surrounding CIT’s targeting of HSBC picked up steam among industry insiders after CIT acquired $446 million of GE Commercial Services’ domestic factoring assets in September.
In business for 90 years, CIT touts itself as the oldest factoring firm in the U.S., handling an estimated $20 billion in annual volume. The firm’s clients range from small companies with $2 million in annual sales to publicly held corporations with $500 million in revenue. The majority have less than $10 million in annual sales.
According to industry observers, the HSBC acquisition will contribute about $7 billion in annual volume.