Press Release: The FINOVA Group Inc.
August 11, 2000
SCOTTSDALE, AZ -- The FINOVA Group Inc. (NYSE: FNV) yesterday announced that it has signed a definitive agreement
to sell its Commercial Services business line to GMAC Commercial Credit LLC. FINOVA's Commercial Services division,
which operates out of offices in New York and Los Angeles, provides factoring and accounts receivable management
services to small and midsize businesses, primarily in the apparel and textile industries.
``We are pleased to announce this strategic divestiture,'' said Matt Breyne, president & CEO of FINOVA. ``We
made the decision to exit the factoring business several months ago, well before we commenced our company-wide
review of strategic alternatives. This decision was made with the realization that factoring has become intensely
price competitive throughout the industry over the last several years, requiring a critical mass significantly
greater than FINOVA's operations. We believe that the sale of the Commercial Services division will enhance our
ongoing strategic review process and allow us to focus resources on our core lending businesses.''
``Our strategy is to continue to expand GMAC's presence in the asset-based lending and factoring business,'' said
Joseph Grimaldi, president & CEO of GMAC Commercial Credit. ``We are pleased to be moving in that direction
with GMAC's continued support of our objectives.''
Breyne continued, ``We are pleased to have reached agreement with GMAC Commercial Credit, one of the largest factors
in the world, who will continue to provide leading-edge products and superior service to our customers. We will
work closely with GMAC Commercial Credit to help assure a smooth transition that will be transparent to customers.''
The boards of directors of FINOVA and GMAC Commercial Credit have approved the transaction, which is expected to
close in the third quarter of 2000, subject to customary conditions such as regulatory approvals.
Breyne also reaffirmed that FINOVA's evaluation of strategic alternatives is continuing, with various forms of
transactions under review, including a sale of the company.
GMAC acquired the asset-based lending and factoring operations of the Bank of New York Financial Corporation in
1999, renaming it GMAC Commercial Credit.
GMAC, a wholly owned subsidiary of General Motors Corporation since 1919, operates under the brand name GMAC Financial
Services. In addition to worldwide automotive financing, its major businesses are insurance, mortgages and commercial
finance (business-to-business lending). GMAC's 27,000 employees work in over 700 facilities in 37 countries.
The FINOVA Group Inc., through its principal operating subsidiary, FINOVA Capital Corporation, is one of the nation's
leading financial services companies focused on providing a broad range of capital solutions primarily to midsize
business. FINOVA is headquartered in Scottsdale, Ariz., with business development offices throughout the U.S. and
in London, U.K., and Toronto, Canada. For more information, visit the company's website at www.finova.com.
SOURCE: The FINOVA Group Inc.