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Navient (NAVI) Buys Earnest for $155M to Enforce Digitization
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Wilmington-based Navient Corporation (NAVI - Free Report) has entered into a cash-acquisition deal with San Francisco-based Earnest, a financial technology company, under which the former will acquire the latter for a total value of $155 million. In this era of digitization, the combined entity will serve consumer-centric education credit products.
The deal awaits certain customary approvals. Moreover, the transaction is anticipated to close in fourth-quarter 2017.
“Combining Earnest’s best-in-class data science, digital marketing, and technology with Navient’s industry and capital markets experience create an exciting platform to deliver value for consumers and investors,” said Jack Remondi, president and CEO, Navient.
Terms of the Deal
Per the deal, the remaining share repurchase program of Navient will be suspended till the end of 2018, though the annual dividend of 64 cents remains in place. Notably, the capital will be invested toward growth of the education-lending business and building book value.
Earnest is a financial technology and education finance company serving consumers unable to get finance from traditional banks. Initiated in 2013, the company is likely to serve with loans worth $1 billion in student loan refinancing loans in 2017.
Notably, post acquisition, the brand — Earnest — would continue as before, headed by its current management team. In addition, clients of Earnest will be served with the same rates, terms and benefits they are entitled to.
J.P. Morgan Securities LLC, a unit of JPMorgan Chase & Co. (JPM - Free Report) , served as a financial advisor to Navient, while Barclays PLC (BCS - Free Report) acted as the financial advisor for Earnest.
Bottom Line
We believe the latest acquisition is a befitting one that will likely support Navient’s future prospects, which faces potential threat from lack of access to new loans and alternative sources of revenues. The company’s focus on tapping growth opportunities is anticipated to boost its overall business performance. Further, a gradually improving economy and declining unemployment rate are expected to provide support to the company.
Notably, the company's share price rose nearly 1% over the last six months, as compared with 6.8% growth recorded by the industry.
A better-ranked company includes M&T Bank Corporation (MTB - Free Report) with a Zacks Rank #2 (Buy). Earnings estimates for 2017 have been revised slightly upward, in the past 30 days. Also, in a year’s time, the company’s shares have jumped 35.8%.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
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Navient (NAVI) Buys Earnest for $155M to Enforce Digitization
Wilmington-based Navient Corporation (NAVI - Free Report) has entered into a cash-acquisition deal with San Francisco-based Earnest, a financial technology company, under which the former will acquire the latter for a total value of $155 million. In this era of digitization, the combined entity will serve consumer-centric education credit products.
The deal awaits certain customary approvals. Moreover, the transaction is anticipated to close in fourth-quarter 2017.
“Combining Earnest’s best-in-class data science, digital marketing, and technology with Navient’s industry and capital markets experience create an exciting platform to deliver value for consumers and investors,” said Jack Remondi, president and CEO, Navient.
Terms of the Deal
Per the deal, the remaining share repurchase program of Navient will be suspended till the end of 2018, though the annual dividend of 64 cents remains in place. Notably, the capital will be invested toward growth of the education-lending business and building book value.
Earnest is a financial technology and education finance company serving consumers unable to get finance from traditional banks. Initiated in 2013, the company is likely to serve with loans worth $1 billion in student loan refinancing loans in 2017.
Notably, post acquisition, the brand — Earnest — would continue as before, headed by its current management team. In addition, clients of Earnest will be served with the same rates, terms and benefits they are entitled to.
J.P. Morgan Securities LLC, a unit of JPMorgan Chase & Co. (JPM - Free Report) , served as a financial advisor to Navient, while Barclays PLC (BCS - Free Report) acted as the financial advisor for Earnest.
Bottom Line
We believe the latest acquisition is a befitting one that will likely support Navient’s future prospects, which faces potential threat from lack of access to new loans and alternative sources of revenues. The company’s focus on tapping growth opportunities is anticipated to boost its overall business performance. Further, a gradually improving economy and declining unemployment rate are expected to provide support to the company.
Notably, the company's share price rose nearly 1% over the last six months, as compared with 6.8% growth recorded by the industry.
Currently, Navient carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked company includes M&T Bank Corporation (MTB - Free Report) with a Zacks Rank #2 (Buy). Earnings estimates for 2017 have been revised slightly upward, in the past 30 days. Also, in a year’s time, the company’s shares have jumped 35.8%.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>