Stellantis in Auburn Hills today announced it has entered into a definitive agreement to acquire F1 Holdings Corp., parent company to First Investors Financial Services Group, a leading independent auto finance company, in an all-cash transaction for approximately $285 million, subject to adjustments for closing balance sheet and certain outstanding options.
The seller includes an investor group led by Gallatin Point Capital and affiliates of Jacobs Asset Management.
“This transaction marks a significant milestone in Stellantis’ sales finance strategy in the critical U.S. market,” says Carlos Tavares, CEO of Stellantis. “First Investors has an outstanding financial and operational platform, underpinned by a strong management team, with vast experience in the auto finance space.
“Direct ownership of a finance company in the U.S. is a white-space opportunity which will allow Stellantis to provide our customers and dealers a complete range of financing options, including retail loans, leases, and floorplan financing in the near-to-medium term.”
Stellantis’ strategic objective is to establish a U.S. captive finance company to support its sales and fully capitalize on its strong market position while creating long-term value for Stellantis shareholders.
The acquisition of First Investors allows Stellantis to create a platform from which to grow a full-service captive finance organization. Stellantis is the only major OEM currently operating in the U.S. without a captive auto finance company.
The transaction represents a meaningful strategic opportunity, with significant potential for accretive earnings generation and improving customer loyalty. A captive U.S. finance company will enhance the ownership experience and connectivity in the digital age for the automaker’s brands — Jeep, Ram, Dodge, Chrysler, Fiat, and Alfa Romeo.
“Becoming part of Stellantis provides long-term stability for our company and employees,” says Tommy Moore Jr., president and CEO of First Investors. “We believe there are significant untapped growth opportunities for First Investors under Stellantis ownership as we expand our product suite to support the auto sales growth of Stellantis.
“The First Investors management team is fully committed to ensuring a smooth and rapid integration into Stellantis. Meanwhile, we remain committed to continuing to offer our loans and services to our existing network of dealers and current business partners.”
The transaction is expected to close by the end of 2021, subject to customary closing conditions and regulatory approvals.
BofA Securities served as exclusive financial advisor, and Sullivan & Cromwell is the legal advisor to Stellantis. Ardea Partners served as exclusive financial advisor, and Goodwin Procter is the legal advisor to Gallatin Point and Houston-based First Investors.
