Lending Club Make Shock Acquisition

By AltFi on Thursday 17 April 2014

Alternative Lending

The world’s largest p2p lender has made its first acquisition – and the details of the deal will shock you.

Lending Club has acquired the traditional lending company Springstone Financial for $140m in a cash and stock deal. Springstone provides affordable financing options for consumers looking to finance private education and elective medical procedures.

Renaud Laplanche, CEO of Lending Club, commented:

"The acquisition of Springstone is significantly expanding the services we offer to help consumers achieve their goals.”

"Parents looking to finance their children's education and patients undergoing elective procedures will now have access to Lending Club loans and benefit from responsible, transparent and affordable financing options."

The platform had to raise some capital in order to finance the transaction. $65m in equity capital was raised from T. Rowe Price Associates, Inc., Wellington Management Company, LLP, BlackRock and Sands Capital. Lending Club also took on $50m in debt financing to fund the acquisition. The remainder of the deal was financed by Lending Club stock.

Henry Ellenbogen, Portfolio Manager at T. Rowe Price Associates, Inc., said:

"We believe that Lending Club has an opportunity to transform an important part of the banking system into a transparent online marketplace.”

"The Springstone acquisition is another step in that direction, and we are very excited at the prospect of being a long term equity partner of Lending Club."

By the estimation of Peter Renton of Lend Academy (based on Lending Club’s 8-K filing), the platform is now valued at a staggering $3.8 billion. That figure stood at just $2.3 billion as recently as November 2013. The news of this acquisition will be seen by many as demonstrative of a changing of the guard in the world of finance. 

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