Wells Fargo to Acquire CIT's Construction Unit

June 25, 2007 • Wells Fargo & Company and CIT Group Inc. have signed a purchase agreement for Wells Fargo to acquire CIT Construction, the U.S. construction lending business unit of CIT. Terms of the agreement were not disclosed. The acquisition is expected to be completed by the end of this month. CIT Construction had $2.4 billion in assets and 235 employees as of March 31, 2007.

 

With headquarters in Tempe, Ariz., CIT Construction has provided commercial financing to the construction industry since 1938. It serves contractors who build and repair infrastructure, as well as equipment distributors/dealers that sell and rent construction equipment throughout the U.S. It will operate as a division of Wells Fargo Equipment Finance, Inc.

 

“Consistent with our vision to satisfy all our customers' financial needs, CIT Construction significantly expands our equipment finance lending capabilities and brings us opportunities to serve our customers even better,” said Tim Sloan, group head of Wells Fargo's Commercial Banking, Real Estate and Specialized Financial Services Group. “We'll be able to offer Wells Fargo's full suite of products and services to CIT Construction's customers.”

 

“Our decision to exit this long-standing CIT business reflects our commitment to increasing shareholder value through proactive portfolio management as we look to redeploy capital to other high growth areas of our business,” said Walter Owens, president of CIT's Corporate Finance Group.

 

CIT Construction originates and services senior secured loans collateralized by a wide range of high-quality construction equipment. It is one of the largest non-captive lenders in the industry with long-standing relationships with most of the industry's leading participants.

 

“This transaction complements Wells Fargo Equipment Finance's strategy of providing capital to meet the needs of customers, ranging from middle market contractors to large manufacturers, in a core U.S. industry,” said John McQueen, head of Wells Fargo Equipment Finance, Inc. “CIT Construction is recognized as an industry leader. The team that will be joining us is experienced, passionate and committed to the construction industry. We look forward to building on its success by providing additional products and services for both our customers.”

 

“Our commitment to providing our customers with the same quality service they have come to expect will be seamless as a result of this transaction,” said Ron Riecks, president of CIT Construction. “Our team is excited to join the Wells Fargo family and build upon our financing record of success.”