Investors including JAM Special Opportunities Fund II have put $12.5 million into Houston-based First Investors Financial Services Group Inc. The purchase of 1.7 million shares will occur across two tranches, the company said Friday. The money will be used to fund growth in First Investors’ portfolio of automobile receivables and for general corporate purposes. Falconbridge Capital Markets LLC served as an advisor to First Investors.
First Investors Financial Services Group, Inc. (Pink Sheets: FIFS) announced today that it had entered into a definitive binding agreement with certain accredited investors to sell 1,666,667 shares of common stock to the investors at $7.50 per share. The purchases will occur in two tranches, the first of which closed today and covered 666,667 shares and gross proceeds of $5 million. The second closing is expected to occur in November, 2011 and will cover the remaining 1,000,000 shares for gross proceeds of $7.5 million. The investors include JAM Special Opportunities Fund II, a private equity fund controlled by Seymour Jacobs, a director of the Company and other affiliated investors. Proceeds from the sale will be utilized by the Company to fund growth in its portfolio of automobile receivables and for general corporate purposes. Falconbridge Capital Markets LLC served as an advisor to the Company on the transaction.
The Company also announced that it had reached an agreement with its warehouse lender to extend its warehouse credit facility to August 2012. Under the terms of the renewal, the Company elected to reduce the commitment from $350 million to $300 million in light of its intent to access the term securitization market on a more frequent basis. No other material changes were made to the renewal terms.
Tommy A. Moore, Jr., President and CEO stated, “First Investors is pleased to have reached an agreement with our investors to purchase $12.5 million in common stock. We will be utilizing the proceeds from this equity issuance along with our warehouse credit facility and the term securitization market to fund what we expect to be strong growth in our portfolio over the next several years. We are excited about the fundamentals in the subprime market and are focused on accelerating the growth in both our indirect and direct portfolios while also pursuing other opportunities to acquire or originate attractive assets. For the fiscal year ended April 30, 2011, we increased new loan originations by 182%, to $143.2 million, compared to the prior year period, We recently announced a great addition to our executive management team, David Satterfield, who will be responsible for overseeing our growth going forward from a marketing and credit perspective. We have recently begun expanding our sales staff to support the expansion of our market presence and dealer base, and are looking forward to what we believe will be an exciting fiscal 2012.”
First Investors is a specialized consumer finance company engaged in the origination and retention of automobile finance receivables originated from franchised automobile dealers and directly through consumers from the sale or refinance of new and late-model used vehicles. The Company is headquartered in Houston, Texas and licensed or exempt from license in 37 states.
The statements contained in this release, which are not historical statements of fact, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve a number of risks and uncertainties. The actual results of future events could differ materially from those stated in any forward-looking statements herein.