Enova to acquire online small business lending company OnDeck

Enova acquisition of OnDeck : Enova International, a Chicago-based provider of online financial services to non-prime consumers and small businesses, has agreed to acquire OnDeck, an online lender to small business, in a cash-cum-stock deal worth around $90 million or $1.38 per share.

The deal is said to bring together a couple of complementary businesses, combining heir capabilities in consumer and small business online lending.

Enova and OnDeck are both said to be innovators that use data and advanced analytics for simplifying and expanding access to financial services for underserved borrowers.

Established in 2006, the US-based OnDeck provides a variety of term loans and lines of credit, which are tailored for the requirements of small business owners.  The global online small business lending company also caters to bank clients with a technology and services platform that enables online lending to small business customers via its fully-owned subsidiary ODX.

Noah Breslow – OnDeck Chairman and CEO, commenting on Enova acquisition of OnDeck, said: “I am proud of the business we have built and the more than $13 billion of financing we have provided to underserved small businesses since our founding in 2006.

“Following an extensive review of our strategic options, we believe this is the right path forward for our customers, employees and shareholders. Joining forces with Enova, a highly-respected and well-capitalized leader in online lending, and leveraging our combined scale and strengths, provides the best opportunity for our long-term success.”

By adding OnDeck brand, products, and services to its existing portfolio, Enova will create a combined company with considerable scale and diverse product offerings across consumer and small business market sectors that banks and credit unions have difficulty in catering to.

The combination of the two companies had $4.7 billion in originations last year and has served nearly seven million customers.

Commenting on Enova acquisition of OnDeck, David Fisher – CEO of Enova said: “This strategic transaction, which brings together two FinTech leaders, is a great opportunity for customers, employees and shareholders of both companies.

“Together, our companies will be stronger because of the complementary strengths and synergies of our businesses. Acquiring a premier online small business lender and its ODX bank platform, and welcoming its innovative and talented team to Enova, will increase our scale and resources, providing us with opportunities to accelerate growth in our increasingly diversified portfolio as we continue to execute on our strategy to create long-term value for all of our stakeholders.”

After closing the deal, which is likely to occur this year, OnDeck shareholders will own about a 16.7% stake in the combined entity, while Enova shareholders will have a stake of around 83.3%.