Meta Financial in Sioux Falls, S.D., has agreed to buy the tax advance and consumer lending business of Specialty Consumer Services in Hurst, Texas.
The $3.1 billion-asset Meta will pay $15 million in cash and stock for the business, plus an additional $35 million pending certain benchmarks. The deal is expected to close during the fourth quarter.
The deal is expected to generate between 10% and 16% of accretion to Meta's earnings per share in the first full year. Meta expects to earn back the acquisition's 10% dilution to its tangible book value within three or four years.
Specialty Consumer already provides technology and underwriting to Meta to support its tax-advance business relationship with H&R Block and other firms.
On Nov. 1, Meta acquired EPS Financial, a provider of tax-related financial services, for $42.5 million. Last month, Meta agreed to originate up to $1.5 billion of tax-refund advance loans for H&R Block next year.
Some banks have re-entered the market for tax-advance loans, including Republic Bank & Trust and River City Bank, both in Louisville, Ky., after regulators pushed banks out of the business. Meta also makes tax-refund advance loans through Liberty Tax Service in Virginia Beach, Va., and through its Refund Advantage division, a company spokeswoman said.
Sandler O'Neill and Katten Muchin Rosenman advised Meta on the Specialty Consumer transaction. Brown Rudnick was legal counsel to Specialty Consumer.
