Navient completes $155m Earnest acquisition
Written by Chris Lemmon
US asset management and business solutions firm Navient has entered into a $155 million agreement to acquire FinTech lending company Earnest.
Founded in 2013, Earnest serves financially responsible consumers who have been underserved by traditional banks. The company is expected to originate nearly $1 billion in student loan refinancing loans in 2017.
As part of Navient, Earnest will continue as a distinct brand and will be led by its current management team, including founders Louis Beryl and Ben Hutchinson. Earnest clients will continue to enjoy the same customer service, rates, terms and benefits.
Under the terms of the agreement, Navient will acquire Earnest for $155 million in cash. Effective October 4, 2017, Navient will suspend its remaining share repurchase program through year end 2018 to allocate capital towards growing the education lending business and building book value. The company’s annual dividend of $0.64 per share is unchanged.
Jack Remondi, president and CEO of Navient, said: “Combining Earnest’s best-in-class data science, digital marketing, and technology with Navient’s industry and capital markets experience create an exciting platform to deliver value for consumers and investors. Together, we will create and deliver consumer-centric education credit products for the digital age.”
Louis Beryl, co-founder and CEO of Earnest, added: “I am proud to share the momentous news that Earnest is joining the Navient family of companies. By pairing Earnest’s capabilities and technology with Navient’s reach and resources, we can affect change at incredible scale.”
Closing of the transaction is expected in the fourth quarter of 2017, subject to customary closing conditions.