DALLAS, Oct. 8, 2020 /PRNewswire/ -- Auto Experience,
Inc., created in 2018 to pursue strategic business opportunities in
the automobile financing market, today announced it has informed
the board of directors of Consumer Portfolio Services, Inc.
(Nasdaq: CPSS) of its interest in acquiring the company in an
all-cash transaction valued at $135
million. An acquisition at that price would nearly
double the current value of the Nasdaq-listed company.
Based in Irvine, Calif.,
Consumer Portfolio Services (CPS) is an independent specialty
finance company that provides indirect automobile financing to
consumers. In an October 7,
2020 letter to the company formally conveying an "indication
of interest," Auto Experience said it proposes to acquire CPS for
approximately $6.18 per share of
common stock. CPS shares closed at $3.35 on October 7,
2020.
In its letter to CPS, Auto Experience said it would add value to
the company and its shareholders by re-engineering aspects of CPS's
operations, applying proprietary technology and enhanced digital
capabilities as the market increasingly shifts online, and
employing a combination of existing resources and new leadership
steeped in automobile financing and digital commerce.
"Acquiring Consumer Portfolio Services and leveraging our
strategic and operational experience in auto financing and
enterprise technology will create a strong national player that
already has a toe-hold in more than 8,000 automobile dealerships
across the U.S.," said Samuel M.
Ellis, president and chief executive officer of Auto
Experience. "CPS is significantly undervalued based on a
range of performance measures and upside growth opportunities, and
we believe our proposed acquisition would be materially beneficial
to shareholders and, over the longer run, to consumers and
dealers."
Mr. Ellis brings deep entrepreneurial and operating experience
in automobile financing and digital commerce to this
opportunity. In addition to his leadership of Auto
Experience, which is focused on the strategic application of
technology and digital innovation in the auto financing market, Mr.
Ellis was previously the founder and CEO of Dallas-based DriverUp, an online marketplace
focused exclusively on automobile finance. Earlier, he was
founder and CEO of Exeter Finance Corp., also based in
Dallas. For nearly a decade, Mr. Ellis served as senior vice
president of risk management for GM Financial/AmeriCredit, the
financial arm of General Motors Corp.
The business of Consumer Portfolio Services is based on
purchasing retail installment contracts from franchised automobile
dealerships, funding contract purchases primarily through the
securitization markets and servicing the contracts over their
lives. CPS began operations in 1991 and has purchased nearly
$17 billion in contracts from its
inception through the first half of 2020. At mid-year, it
reported actively servicing a contract portfolio of approximately
$2.3 billion and 173,000
customers. CPS's full-year 2019 revenue was $346 million with net income of $5.4 million.
In its letter to the company, Auto Experience asked for a
response from the CPS Board by October 30,
2020.
About Auto Experience
Auto Experience is focused on strategic acquisitions that will
advance the development of mainstream, online auto financing
transactions and other consumer services in the automotive
vertical. The company targets strategic opportunities that can
transform good organizations into great ones through re-engineering
of technology, operations and capitalization. Auto Experience
is focused on opportunities that have teams and stakeholders
inspired and committed to improve the consumer experience in all
areas of the retail automotive space. Visit our website at
www.autoexperience.info.
Media Contact:
Tracy
Rubin
JCUTLER media group
tracy@jcmg.com
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SOURCE Auto Experience, Inc.