LINCOLN, Neb., Oct. 19, 2017 /PRNewswire/ -- Nelnet (NYSE: NNI)
announced today it has entered into a definitive and binding
agreement with Great Lakes Higher Education Corporation to acquire
100% of the stock of their student loan servicing company, Great
Lakes Educational Loan Services, Inc. (referred to as Great Lakes
throughout this press release).
"This is a perfect match of two student loan servicing
organizations with closely aligned values anchored on delivering
unparalleled customer experiences," said Jeff Noordhoek, Nelnet chief executive officer.
"Great Lakes has a history of serving students and their families
with integrity, high standards, and great service. We could not be
more excited for them to join the Nelnet family."
"We are bringing together 90 years of industry experience,
including providing outstanding service to federal and private
student loan borrowers, lenders, and schools. With our combined
resources, we will take an approach that features best-in-class
technology systems, proven operational capabilities, and customer
experience innovations, to create a superior experience that
ensures all borrowers find the best repayment options for their
individual circumstances," said Noordhoek. "Great Lakes and Nelnet
now have the opportunity to transform student loan servicing for
millions of borrowers, providing a consistent and unmatched
borrower experience and the best technology for student loan
servicing."
Headquartered in Madison,
Wisconsin, Great Lakes and its parent affiliated group have
been helping students access higher education since 1967. Today,
Great Lakes has 1,800 employees.
"Today is a great day for Great Lakes and our employees, and the
customers we have the opportunity to serve," said Jeff Crosby, Great Lakes chief executive
officer. "Great Lakes and Nelnet have been leaders in student loan
servicing for decades by focusing on operational excellence and by
believing we can always do more to serve our customers. Our values
and teams complement each other and I am confident we will be able
to do even more to improve the lives of the borrowers, lenders, and
schools we serve as a part of the same team."
In 2009, Great Lakes and Nelnet were awarded contracts to
service government-owned student loans on behalf of the U.S.
Department of Education. These contracts are set to expire in
June 2019.
After the transaction settles, Great Lakes and Nelnet will
maintain their distinct brands, servicing operations, and
operational teams, with Jeff Crosby
leading Great Lakes as its chief executive officer, and each will
continue to compete for new student loan volume under its
respective existing contract with the Department of Education. Over
time, shared services teams will integrate and support both the
Great Lakes and Nelnet servicing operations.
Nelnet and Great Lakes have also been working together for
almost two years to develop a new, world class servicing system for
government-owned student loans through a joint venture. The
servicing platform under development will utilize modern technology
to effectively scale for additional volume, protect customer
information, and support enhanced borrower experience initiatives.
The efficiencies gained by leveraging a single platform for
government-owned loans supporting millions more borrowers will give
Great Lakes and Nelnet opportunities to invest in strategies to
further enhance borrower experiences.
"Moving forward with the development of our state-of-the-art
loan servicing platform will enable us to provide the best possible
experience for borrowers as our organizations come closer
together," said Joe Popevis,
president of Nelnet Diversified Solutions (NDS). NDS owns Nelnet
Servicing, Nelnet's servicing business, and will also own Great
Lakes' servicing business. "This transaction accelerates our
technology integration and collaboration, leaving us in the
strongest position possible to enhance the development of the new
platform."
Under the terms of the agreement, Nelnet will
pay $150.0 million in cash for all of the outstanding
stock of Great Lakes. The transaction will settle on
January 1, 2018, subject to customary
closing conditions, primarily the expiration or termination of the
applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
Great Lakes will also continue to provide technology and certain
administrative support services to Great Lakes Higher Education
Corporation pursuant to a guarantor services agreement.
Forward-Looking and Cautionary Statements
Information contained in this press release, other than
historical information, may be considered forward-looking in nature
and is subject to various risks, uncertainties, and assumptions.
The words "expect," "intend," and "will," and similar expressions
are intended to identify forward-looking statements. Should one or
more of the risks or uncertainties to which such forward-looking
statements are subject materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those anticipated, estimated, or expected. Among the key
factors that may have a direct bearing
on Nelnet's operating results, performance, or financial
condition expressed or implied by the forward-looking statements
are risks that the announced acquisition agreement may not be
completed within the currently scheduled timeframe or at all, the
uncertain nature of the expected benefits from the acquisition and
the ability to successfully integrate loan servicing operations and
successfully maintain and increase allocated volumes of student
loans serviced under existing and any future servicing contracts
with the Department, risks to Nelnet and Great Lakes related to the
Department's initiative to procure new contracts for federal
student loan servicing, including the risk that the company's joint
venture with Great Lakes, or the company on a post-acquisition
basis, may not be awarded a contract, risks related to the
development by Nelnet and Great Lakes of a new student loan
servicing platform, including risks as to whether the expected
benefits from the new platform will be realized, and other risks,
including the risk of increased regulatory costs. All
forward-looking statements in this release are as of the date of
this release. Although the company may from time to time
voluntarily update or revise its forward-looking statements to
reflect actual results or changes in the company's expectations,
the company disclaims any commitment to do so except as required by
securities laws.
About Nelnet
Nelnet (NYSE: NNI) is a diversified and innovative company
focused on offering educational services, technology solutions,
telecommunications, and asset management. Nelnet helps
students and families plan and pay for their education and makes
the administrative processes for schools more efficient with
student loan servicing, tuition payment processing, school
administration software, and college planning resources. Through
its recently acquired subsidiary, ALLO
Communications, Nelnet offers fiber optic services
directly to homes and businesses for ultra-fast internet and
superior telephone and television services. The company also makes
investments in real estate developments and new ventures. For more
information, visit Nelnet.com.
(code #: nnig)
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