European American Bank's agreement last week to acquire American Equipment Leasing Co. is the Long Island-based bank's second major move into the leasing business.
American Equipment is a national leasing and finance company based in Reading, Pa. Terms of the transaction have not been disclosed, but European American is said to be paying more than $200 million for the company, partially to repay American Equipment's debt.
The Pennsylvania leasing company has $160 million in assets.
In a similar move aimed at building up direct leasing operations with small and medium-sized companies, European American spent $106 million last October to acquire Wasco Funding Corp., a Manhattan-based leasing company with about $100 million in assets.
"We are continually seeking ways to increase our capacity to serve small and midsize businesses," said Edward Travaglianti, European American's chairman and chief executive. "This acquisition further expands EAB's leasing operations both geographically and into new industry segments."
Leasing companies purchase equipment, then rent it to companies or individuals, usually for three to five years. Over the last few years American Equipment has been expanding its operations to include law firms, equipment rental companies and even golf courses. The company operates in all 50 states through a staff of 40 field representatives.
European American said it plans to retain American Equipment's president, Arthur A. Haberberger, and will operate the newly acquired unit as an independent subsidiary.
European American, a $7.9 billion-asset, Uniondale, N.Y.-based banking unit of Holland's ABN Amro Bank,has 86 branches and handles mainly retail and middle-market business in New York City and Long Island.
ABN Amro has a total of more than $42 billion in assets in the United States, making it one of the largest foreign banks. The Dutch bank has targeted the United States as its second major market outside Europe. Over the last few years, it has concentrated on acquiring banks and thrifts in the Chicago region.
American Equipment Leasing is a unit of Horrigan American Inc., a holding company whose other main subsidiary is American Real Estate and Development Co. The real estate development unit's assets are to be taken over by Horrigan's shareholders.