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Consolidations, Mergers Will Improve Operations

Consolidations, Mergers Will Improve OperationsRecent mergers and acquisitions activity

April 25, 2005


Two recently announced transactions will result in more streamlined operations, according to the principals.

In Delaware, financial services company MBNA Corp. recently announced it will acquire Nexstar Financial Corp. in a deal expected to close this quarter. Financial terms were not disclosed.

Missouri-based Nexstar, a business process outsourcer in the home finance market, will significantly reduce MBNA’s costs to originate home equity loans, among other benefits, the announcement said.

“By integrating the Nexstar platform with our existing operations, MBNA will provide private label and co-branded home equity loans through our many affinity group partners, further broadening our relationships with these groups,” MBNA Vice Chairman Richard Struthers said in the announcement. “Our affinity partners will be able to offer a broad array of home loan products to their millions of members with the confidence that the loan origination process will be handled smoothly and efficiently.”

MBNA will acquire all of Nexstar’s assets, including the company’s proprietary home loan origination and processing platform. Nexstar will retain its name and operate as a subsidiary. All of Nexstar’s facilities will remain in operation, and its management and existing employees will join the Delaware-based acquirer, according to the announcement.

Clayton Services Inc. and Murrayhill Co. united under a newly formed company under the name Clayton Holdings Inc., according to a recent press release. The controlling shareholder of both entities, TA Associates, has invested $134 million of capital into the new organization, which will be headquartered in Shelton, Conn., according to the announcement.

Shelton-based Clayton Services is a provider of loan and portfolio analysis, operations support, and consulting services, according to the announcement, while Denver-based Murrayhill is reportedly a securities surveillance and credit risk management business.

The newly formed entity will leverage each company’s technology, databases, and analytical and consulting capabilities to provide information-based services to support nonconforming lending as well as securities issuance and performance management, the announcement said. It will cover nonconforming mortgage-backed securities, commercial mortgage-backed securities and asset-backed securities markets, which represent combined principal value in excess of $1.6 trillion.

“Uniting under a common banner brings us closer to our goal of seamless delivery of every aspect of transaction oversight, from pre-securitization through the life of a loan pool, for the fixed income industry,” said Sue Ellis, Murrayhill founder and chief executive, in a written statement.

Clayton Holdings chairman and chief executive will reportedly be Frank Filipps, upon his retirement from Radian Group Inc.

PrivateBancorp Inc. announced it will acquire Bloomfield Hills Bancorp. Inc. in a $64 million cash transaction expected to close early next quarter.

Bloomfield operates a single bank subsidiary, The Private Bank, which has three locations in affluent Detroit-area communities.

Chicago-based PrivateBancorp’s acquisition is consistent with its strategy of expanding into affluent communities, which “combined with our earlier entries into the St. Louis and Milwaukee [areas] we will have essentially doubled the size of our potential target market since our initial public stock offering in 1999,” said company chief executive Ralph Mandell in the prepared statement.

The PrivateBank Mortgage Co. forms part of one of PrivateBancorp’s two banking subsidiaries, according to the announcement.

The acquiring company said that it anticipates retaining Bloomfield’s management and staff and intends to operate the bank, wealth management and mortgage banking units under its PrivateBank brand.

Coco Salazar is an assistant editor and staff writer for

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