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Enova to Acquire OnDeck in $90 Million Deal

If deal-making is a sign of the health of an industry, then the fintech business – global public health crisis notwithstanding – may be doing better than some suspect.

The latest signs of hi-life from the nexus of finance and technology comes from the news released after hours on Tuesday that Enova International – an online financial services company that provides financing to non-prime borrowers and small businesses – has agreed to acquire OnDeck in a deal valued at $90 million.

“This strategic transaction, which brings together two FinTech leaders, is a great opportunity for customers, employees, and shareholders of both companies,” Enova CEO David Fisher said. “Together, our companies will be stronger because of the complementary strengths and synergies of our businesses.”

Fisher highlighted both OnDeck’s online SME lending business as well as its ODX bank platform as being able to increase Enova’s “scale and resources” and drive continued growth in the company’s portfolio. Enova has nearly seven million customers worldwide and has provided more than $20 billion in loans and financing since its inception in 2004.

Of the $90 million total deal value, $8 million will be paid in cash. OnDeck shareholders will get $0.12 per share in cash and 0.092 shares of Enova stock for each share of OnDeck they own. The deal is based on the implied price of OnDeck shares of $1.38, a 90.4% premium on its closing price of $0.73 per share on Monday, July 27. Enova’s Fisher will lead the combined company, with OnDeck CEO Noah Breslow assuming the role of Vice Chairman and taking a seat on the company’s management team.

Breslow expressed pride in the progress OnDeck has made since its founding in 2006, pointing to the $13+ billion in financing the company has provided small businesses over the past decade-and-a-half or so. He said the acquisition was “the right path forward for customers, employees, and shareholders” and posited that the combined entity would be an even more effective online lender and a more powerful ally to small businesses.

The acquisition has been approved by the boards of directors from both Enova and OnDeck, and is expected to close later this year.

Photo by Tatiana from Pexels