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Pathward Financial (NASDAQ:CASH) has announced its decision to sell its commercial insurance premium finance business to AFS IBEX Financial Services, LLC, a Delaware limited liability company, for $617.1 million plus $31.2 million premium.
As per the terms of the purchase agreement, the cash purchase price that AFS will pay for the loan portfolio was valued at $617.1 million as of June 30, 2024, and will also take over its real property leases. Furthermore, there is an additional premium of $31.2 million, which is subject to changes in the loan portfolio, along with the assumption of certain liabilities, which are also subject to adjustment.
AFS is a subsidiary of Honor Capital Holdings, LLC, also a Delaware limited liability company. Honor Capital Holdings, through its subsidiaries, is a prominent player in the insurance premium finance industry, being one of the largest independently owned companies.
The agreement has several key components, including AFS’s commitment to offering employment to individuals within the commercial insurance premium finance business under specific conditions.
The transaction is expected to close by the end of fiscal year 2024 and be neutral to fiscal 2024 net income and earnings per share. However, it’s anticipated to become increasingly accretive as Pathward redeploys capital into higher-yielding assets.
