Magazine article American Banker

Shawmut to Pay $290M for Barclays Finance Unit

Magazine article American Banker

Shawmut to Pay $290M for Barclays Finance Unit

Article excerpt

Shawmut National Corp. said Monday it signed a definitive agreement to acquire Barclays Business Credit, the U.S. commercial finance subsidiary of Barclays Bank PLC, for $290 million.

For Shawmut, which has dual headquarters in Boston and Hartford, Conn., the deal means it can expand its lending operations nationwide instead of depending on its New England market, where the economy has only recently begun a slow improvement.

The acquisition "greatly ,enhances the geographic diversity of our loan portfolio and adds an established, nationwide origination capability," said Joel Alvord Shawmut's chairman and CEO.

The Barclays unit provides asset-based lending to middlemarket companies through 15 offices nationwide. Even though the ,company is based in Glastonbury, Corm., more than 90% of its outstanding receivables are located outside New England and more than 80% are located outside the Northeast, said Mr. Alvord.

The London-based parent of Barclays Business Credit has been selling most of its U.S. subsidiaries for two years.

"The Barclays Group's strategy in the U.S. is to concentrate on serving investment banking clients, particularly those whose requirements are global," said Mahin Taylor, its chief executive.

For $31 billion-asset Shawmut, the transaction brings assets of $217 million.

Barclays Business Credit makes loans to companies that have annual revenues of $50 million to $150 million. Mr. Alvord says he plans to keep the unit's current management team in place, including chairman Peter Bland, and all 300 of its employees. …

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