Jack Remondi, President and CEO of Navient, believes the Earnest acquisition will create "consumer-centric education credit products."
The news was made public after Navient issued a press release detailing the acquisition.
Jack Remondi, the President and CEO of Navient, offered the following statement for Navient’s press release: “Combining Earnest’s best-in-class data science, digital marketing, and technology with Navient’s industry and capital markets experience create an exciting platform to deliver value for consumers and investors. Together, we will create and deliver consumer-centric education credit products for the digital age.”
Earnest will continue to operate as their own unique brand and its leadership team will remain in place. The two founders, Louis Beryl and Ben Hutchinson, will continue to lead Earnest, but now they will work in tandem with the leadership team at Navient. Any client that has done business with Earnest in the past will still receive the exact same rates, benefits, terms, and customer service as they had been accustomed to.
As mentioned earlier, the Navient - Earnest acquisition price was $155 million in cash. Starting on October 4th, 2017, Navient has suspended its share repurchase program until the end of 2018. That is being done so that money can be put towards expanding the company’s education lending business.
Navient had J.P. Morgan Securities LLC acting as a financial advisor, while Barclays took on the same role for Earnest.
Earnest, founded in 2013, is an online student loan lending company that offers both a student loan refinancing service and a Parent PLUS loan refinancing service. The company also allows users to compare personal loan options.
When it comes to acquiring companies, Navient has been quite aggressive as of late. In early August, The Student Loan Report wrote that the student loan servicer had acquired Duncan Solutions, a transportation revenue management company, for $80 million. The point of that purchase is to expand Navient’s business beyond the education space, according to John Kane, Group President of Navient’s Business Processing Solutions division.
Later in August, it was announced by the Utah Governor’s Office of Economic Development that Earnest would be adding 500 jobs and $5.6 million in capital investment to the state of Utah. At the time, the announcement seemed like a major move by Earnest, which was expanding beyond San Francisco for the first time in the company’s history.
Image Copyright © Jack Markell