CHICAGO (Dow Jones)--JPMorgan Chase & Co.'s (JPM) JPMorgan Chase Bank agreed to buy Collegiate Funding Services Inc. (CFSI) for about $663 million, or $20 a share in cash, to create an education finance business.
JPMorgan's offer represents a 31% premium to Collegiate Funding Services' closing price of $15.27 in Nasdaq composite trading Wednesday.
In a press release Thursday, Chase Bank said it expects the transaction with Collegiate Funding, a student loan servicing and consolidation company, to close in the first quarter. Lightyear Fund L.P., Collegiate Funding Services' largest shareholder, has agreed to vote its shares in favor of the deal.
Upon completion of the transaction, Collegiate Funding Services President and Chief Executive J. Barry Morrow will become president of the combined Chase Education Finance business. He will report to Brad L. Conner, who has responsibility for home equity and education lending at Chase.
