NEW YORK and FT. LAUDERDALE, FL – Perry Capital LLC, an investment management firm with approximately $11 billion under management, today announced that it has reached agreement to acquire the business and assets of Capital Factors, Inc. and Capital Tempfunds, Inc. from the Union Planters Bank, N.A., division of Regions Financial Corporation (NYSE: RF). The terms of agreement are not disclosed. Going forward, Perry Capital will invest up to $100 million of capital to support management’s strategy to build a leading commercial finance company to serve the middle market. Andrew Tananbaum, a highly regarded veteran of the commercial finance industry, will make a significant investment in addition to serving as CEO of the new company, to be called Capital Factors LLC.
“We believe the combination of Andy Tananbaum’s expertise, experience, and entrepreneurial energy with Perry’s depth of capital and view towards creating a powerful, creative, long term focused credit business will alter the existing landscape,” said Ori Uziel from Perry Capital.
“I am very pleased to be leading this exciting venture,” Andrew Tananbaum said. “There is a tremendous opportunity for a commercial lender with a merchant-banking approach. Factoring has become dominated by a few large players focused on volume rather than solving their clients’ problems. We understand the challenges faced by entrepreneurs with compelling business opportunities and complex business and credit issues, and we look forward to serving and solving them.”
The new company, which will employ more than 200 people, will be headquartered in New York City and Fort Lauderdale, with regional offices in Highpoint, North Carolina, and Los Angeles, California.
“I am happy to say that substantially all of the current employees of Capital Factors will continue with the company,” Tananbaum added. “With their help, we immediately intend to reach out to our clients to set a proactive tone and underscore the creative and thoughtful approach that will define our credit culture.”
Richard Perry, founder of Perry Capital, said: “We believe that we are acquiring an existing platform that will focus on underwriting credit with a unique focus on client service that does not exist today. We are seeing inefficiencies in middle market secured lending and we see this as the first step towards building a leading enterprise and capturing a larger opportunity.”
Initially, Capital Factors will focus on serving clients in the consumer- products supply chain, primarily apparel and furniture manufacturers, and in the temporary staffing industries. The company, which handles approximately $3 billion in factoring volume, intends to extend its reach into new industries through both organic growth and acquisitions.
Andrew Tananbaum joined Century Business Credit Corporation in 1982 and served as the President and chief executive officer from 1987 until 2000. Taking Century private in 1987, Tananbaum was responsible for growing the business into the 7th largest factoring company in the U.S. with over $3 billion in factoring volume. Century was the first traditional domestic factor and commercial finance company to emphasize international trade finance importers and their Asian suppliers.
Perry Capital was represented by Weil, Gotshal, & Manges. Capital Factors and Regions Financial Corporation were represented by Alston & Bird. Working as financial advisor to Perry Capital and Andrew Tananbaum was IXIS Capital Markets.
About Capital Factors LLC
Capital Factors LLC is an innovative and leading provider of factoring, credit protection, accounts receivable collection services, and other specialized lending products. Capital Factors specializes in servicing the apparel and furniture industries as well as others that sell into retail. Capital Tempfunds, a division of Capital Factors, provides lending and back office support exclusively for the staffing industry.
About Perry Capital
Founded in 1988, Perry Capital is a leading investment management firm with approximately $11 billion under management. Perry Capital has offices in New York, London, and Hong Kong.
About Regions Financial Corporation
Regions Financial Corporation, headquartered in Birmingham, Ala., is a full-service provider of retail and commercial banking, securities brokerage, mortgage, and insurance products and services. With its merger with former Union Planters Corp. complete, Regions had assets of $84.1 billion as of Dec. 31, 2004, making it one of the nation’s Top 15 financial services providers. Regions’ banking subsidiaries, Regions Bank and Union Planters Bank, operate some 1,400 offices and a 1,700-ATM network across a 15-state geographic footprint in the South, Midwest and Texas. Its investment and securities brokerage, trust and asset management division, Morgan Keegan & Company Inc., provides services from more than 240 offices. Additional information about the new Regions, which is a member of both the Forbes and Fortune 500 and operates one of the Top 20 mortgage companies in the United States, can be found at http://www.regions.com .
