Household International Inc., which is jockeying for position in the subprime credit card market, said Thursday that it will buy Renaissance Holdings Inc. for $300 million.

The Prospect Heights, Ill., consumer finance giant is paying six times book value for Renaissance, a Portland, Ore., card marketer that has been handling Household's less-creditworthy accounts since January. The deal is a bid by Household to gain credibility in the increasingly complex and competitive subprime card business.

Though some questioned its price, analysts said the deal would give $76 million-asset Household the subprime management experience it needs to compete with industry leaders Providian Corp., Capital One Financial, and Metris Cos.

The deal is expected to close in the current quarter.

Household has been signaling its subprime credit card intentions for some time. It halted its mass-mail marketing in January to focus primarily on higher-risk customers, to whom it sells such products as mortgages, auto loans, and private-label cards.

It sold more than $2 billion of its $5 billion general-purpose card portfolio in the fourth quarter of last year and another $150 million of prime-rated receivables in the second quarter of 1999.

Household, the ninth-largest card issuer, with $12.6 billion of receivables, retained the General Motors and Union Privilege card programs, which represent 80% of its card business. Union Privilege is a cobranded program with the AFL-CIO.

In August, Bobby Mehta, a group executive in charge of Household's Salinas, Calf., card operation, said: "We wanted to find where we had a competitive advantage and to discover where we could build a strong position. Both of those questions lead you to the underserved market."

Some observers, however, saw the portfolio reductions as a precursor to a complete departure from the business. "Household has been doing a lot of soul-searching over the last 18 months," said David Robertson, president of The Nilson Report, a card-industry newsletter in Oxnard, Calif.

Skeptics noted that Household's receivables growth has been poor - in the third quarter it was down 21% from a year earlier.

"There were as many people in the industry that thought Household would be selling rather than buying," said Michael Auriemma, president of Auriemma Consulting Group, Westbury, N.Y.

Mr. Mehta said the subprime market is "in the early stages of development." But some analysts said Household is arriving to the party late.

"Everyone licks their chops when they look at that business, because it's going to continue to grow," Mr. Robertson said. "But it is a risky business, and nothing is as important as solid management."

Renaissance's management is highly regarded. The eight-year-old company provides agent banking card services to companies including First Union Corp. and Bally's Total Fitness, which offers a MasterCard to its members. In 1997, GE Capital Services acquired a minority stake in the company, which manages more than one million card accounts.

Mark Alpert, an analyst at Deutsche Banc Alex. Brown, estimates that Renaissance's 1999 revenues will be $15 million.

Irving Levin, chief executive officer and founder of Renaissance, said, "We will benefit from Household's much bigger balance sheet."

Renaissance will be renamed Renaissance Credit Services and continue to operate in Portland.

What remains to be seen is how quickly and substantially Renaissance will generate growth for Household. One analyst, who did not want to be identified, said he had reservations about the deal's $300 million cost, which is twice the multiple of book value paid in pricier bank acquisitions.

"It is an expensive transaction for a privately held company," he said. "But Household needs the growth really badly."

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