PNC to Acquire ARCS Commercial Mortgage
Acquisition will expand PNC's multifamily lending and servicing capability
PITTSBURGH, May 9 /PRNewswire-FirstCall/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) announced today that it has signed a definitive agreement to acquire ARCS Commercial Mortgage. Calabasas Hills, California- based ARCS has 10 origination offices in the United States and has been a leading agency lender for the past decade. It originated more than $2.1 billion of loans in 2006 and services approximately $13 billion of loans.
"ARCS will provide PNC with expertise and a customer base that complement our own. Together we will offer the full spectrum of financing and servicing options to multifamily owners and investors nationally," said William S. Demchak, PNC vice chairman and head of Corporate & Institutional Banking. "Multifamily housing is one of the largest lending sectors in commercial real estate, and agencies are leading providers of permanent financing products for market rate and affordable multifamily projects."
Financial terms of the agreement were not disclosed. The acquisition is expected to close in the third quarter of 2007, pending regulatory and agency approvals. It is expected to be accretive to earnings within the first year.
"We at ARCS are excited by this opportunity to provide our clients with the broadest possible line of lending products," said Howard J. Levine, founder and chief executive officer of ARCS Commercial Mortgage. "PNC's leadership in commercial real estate finance and its commitment to superior customer service dovetails well with our own. PNC values our vision and our continuing quest for innovative lending solutions to meet our customers' needs. Together, ARCS and PNC can now do even more."
Beekman Advisors acted as financial adviser to ARCS on the transaction.
The PNC Financial Services Group, Inc. (http://www.pnc.com) is one of the nation's largest diversified financial services organizations providing retail and business banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.
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We grow our business from time to time by acquiring other financial services companies. Acquisitions in general present us with risks other than those presented by the nature of the business acquired. In particular, acquisitions may be substantially more expensive to complete (including as a result of costs incurred in connection with the integration of the acquired company) and the anticipated benefits (including anticipated cost savings and strategic gains) may be significantly harder or take longer to achieve than expected. In some cases, acquisitions involve our entry into new businesses or new geographic or other markets, and these situations also present risks resulting from our inexperience in these new areas. As a regulated financial institution, our pursuit of attractive acquisition opportunities could be negatively impacted due to regulatory delays or other regulatory issues. Regulatory and/or legal issues related to the pre-acquisition operations of an acquired business may cause reputational harm to PNC following the acquisition and integration of the acquired business into ours and may result in additional future costs arising as a result of those issues. Post-closing acquisition risk continues to apply to Mercantile as we complete the integration.
SOURCE The PNC Financial Services Group, Inc.
Released May 9, 2007