NEW YORK — CIT Group solidified its position as the nation’s largest factor with the acquisition of SunTrust Banks’ factoring division. Meanwhile, longtime acquisition target Capital Factors Inc. was picked up by New York investment firm Perry Capital LLC.
CIT said it had acquired all of the factoring assets of SunTrust’s Receivables Capital Management for an undisclosed sum on April 1. According to a statement from CIT, the company acquired net assets of approximately $238 million, and acquired approximately $867 million in receivables.
The announcement marks CIT’s third factoring acquisition since 2003. In September 2003, CIT acquired approximately $446 million in U.S. factoring assets from GE Commercial Services. CIT finished 2003 with a New Year’s Eve acquisition of HSBC Bank’s domestic factoring assets, valued at an estimated $1 billion. Net assets acquired were estimated at $270 million.
For Perry Capital, acquiring Capital Factors from Region’s Financial Corp. is the first step in building a middle market commercial finance firm. According to a statement from Perry, the company will invest $100 million in capital and has chosen Andrew Tananbaum as Capital’s new chief executive officer. Tananbaum served as president and ceo of Century Business Credit Corp. from 1987 to 2000, helping drive the company’s factoring volume to more than $3 billion.
The acquisition also marks Perry’s first experience with the factoring industry. “There really is not a factor out there that is thinking about customers and their business from the viewpoint of a merchant bank,” said Ori Uziel, managing director at Perry. “Within the apparel industry we expect to do a lot more international trade finance.”
As he did at Century, Tananbaum is looking to provide clients with traditional factoring services while also offering financing for capital growth. “When you look at the landscape of competitors, in terms of our capabilities, we are on a level playing field,” said Tananbaum.
Capital currently handles approximately $3 billion in factoring volume, primarily in the apparel and furniture industries.