Shareholders in SLM Corporation, the US student loan specialist popularly known as Sallie Mae, have approved the proposed USD25bn acquisition of the company by a private equity-led consort
Shareholders in SLM Corporation, the US student loan specialist popularly known as Sallie Mae, have approved the proposed USD25bn acquisition of the company by a private equity-led consortium comprising J.C. Flowers, Friedman Fleischer & Lowe, Bank of America and JPMorgan Chase.
Under the agreement, Sallie Mae shareholders will receive USD60 in cash for each outstanding share of common stock. J.C. Flowers and Friedman Fleischer & Lowe will own a combined 50.2 per cent stake, while the banks would each invest USD2.2 billion for a combined 49.8 per cent shareholding.
The vote follows Sallie Mae’s insistence that the acquisition will be completed as planned in October, despite concern over the financial of the deal following the drying up of the market for securitisation of private equity financing and fears that it may prove impossible to complete a number of high-profile private equity acquisitions.
Sallie Mae announced earlier this month that it had been advised by the consortium that approval for the transfer of Sallie Mae Bank by the Federal Deposit Insurance Corporation is likely to be obtained in September.
If FDIC approval is not obtained next month, Sallie Mae says it can take steps that will trigger the consortium’s debt marketing period to begin in September. All other conditions to closing the transaction have been met, the company says, with the completion of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the shareholder vote.
SLM Corporation is the biggest US provider of college savings and loan programmes, serving nearly 10 million student and parent customers and managing USD153bn in education loans. Through its Upromise affiliates, the company also manages USD18bn in so-called 529 college savings plans. Sallie Mae and its subsidiaries also offer debt management services as well as business and technical products to clients including higher education institutions, student loan guarantors and US state and federal agencies.
