LITCHFIELD FINANCIAL CORPORATION ACQUIRES IRONWOOD ACCEPTANCE COMPANY
Press Release: Litchfield Financial Corporation
June 25, 1999
Litchfield Financial Corporation (Nasdaq: LTCH) has announced that it has acquired Ironwood Acceptance Company,
LLC. Ironwood, located in Scottsdale, Ariz., specializes in the purchasing, servicing and liquidation of municipal
tax lien certificates. Litchfield, which previously owned 10% of Ironwood, acquired the remaining 90% for approximately
$2.3 million, with one third paid in cash, and the remaining two thirds paid in Litchfield stock over a two-year
period.
Randy Stratton, President and CEO of Litchfield commented, "This acquisition is in keeping with our business
strategy of identifying and lending money to smaller finance companies in niche businesses with strong, experienced
management. After two solid years of experience with Ironwood, and performance that has been consistent with our
expectations, we decided that it made good business sense to expand the relationship with them in a mutually beneficial
way. This acquisition will enable us to increase our presence in the tax lien business, while providing Ironwood
with sufficient capital for expansion.''
Mr. Stratton added, "It has been our strategy to view transactions of this nature as an opportunity to further
reduce the portion of our revenues derived from the gain on sale of loans. So while this transaction would have
been modestly accretive in 1999, and more so in 2000, we'll take this opportunity to further reduce our gain on
sale as a percentage of our revenues, instead.''
Ironwood will become a subsidiary of Litchfield, and its nine employees will continue to operate out of Scottsdale,
Ariz. Peter Reardon will continue to serve in his present position as President of Ironwood. The management of
Ironwood has been successfully purchasing and managing tax liens for over eight years and is currently purchasing
tax lien certificates, through auctions and over the counter sales, in twelve states.
Mr. Stratton noted, "Tax liens will help us further diversify our half billion dollar serviced portfolio.
These investments have small balances, high yields and are well collateralized and highly secure. These characteristics
make tax liens complimentary to our existing consumer land and timeshare loans, hypothecation loans and acquisition
and development loans.''
Litchfield is a diversified finance company that provides financing to
creditworthy borrowers for assets not typically financed by banks. The company provides such financing by making
loans to businesses secured by consumer receivables or other assets and by purchasing consumer loans.
Except for the historical information contained or incorporated by reference in this press release, the matters
discussed or incorporated by reference herein are forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements
of the Company, or industry results, to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include, among others, the risk factors set
forth under "Risk Factors'', as listed in the 1998 Annual Report on Form 10-K, as well as the following: general
economic and business conditions; industry trends; changes in business strategy or development plans; availability
and quality of management; and availability, terms and deployment of capital. Special attention should be paid
to such forward-looking statements including, but not limited to, statements relating to (i) the company's ability
to execute its growth strategies and to realize its growth objectives and (ii) the Company's ability to obtain
sufficient resources to finance its working capital needs and provide for its known obligations.