| 9/17/2004 |
San Francisco, CA, Sept. 17, 2004 – Parthenon Capital, a leading middle-market private equity firm with offices in Boston and San Francisco announced today that a majority interest of Arrow Financial Services LLC, a leading purchaser and collector of consumer debt, was acquired by SLM Corporation (NYSE: SLM), commonly known as Sallie Mae.
Arrow Financial Services, a portfolio company of Parthenon Capital, is a leading, full-service accounts receivable management company that purchases charged-off debt, conducts contingency collection work and performs third-party receivables servicing across a number of consumer asset classes. Arrow Financial employs nearly 1,400 individuals in Niles, Ill., Gaithersburg, Md., San Diego, Calif., Whitewater, Wis., and Rockville Centre, N.Y. The company was founded in 1961 and has been under the continuous management of the Lavin family. It will retain its brand, successful strategy and senior management team.
While in the market to expand the company, Jack Lavin, president and chief executive officer of Arrow Financial saw Sallie Mae as a timely and unique opportunity to continue the outstanding record of growth of the business. Jack Lavin stated, “We partnered with Parthenon Capital in order to bring on a value-added investor that would help us be all that we can be. Parthenon Capital has been a tremendous partner in working with us to institutionalize our company, manage our growth, and execute our strategic plan.” He added. “Now we are ready to embark upon a new opportunity for growth within a large, diversified financial institution. We are proud and excited to be joining the Sallie Mae family and look forward to working with the entire Sallie Mae team in a long and rewarding partnership.”
Brian Golson, Principal, Parthenon Capital worked closely with Arrow Financial Services on both the original investment of Arrow and the majority acquisition by Sallie Mae, in which Sallie Mae acquired all of Parthenon’s interest in the company. Golson stated, “We have greatly enjoyed our partnership with Arrow Financial and the company’s outstanding management team. This investment exemplified two areas of focus for Parthenon Capital, innovative financial services businesses and successful collections operations..” Golson added, “Since our investment, the business has continued its stellar growth trajectory by doubling revenue and nearly tripling earnings and in the process has proven our thesis regarding the growth of the debt buying industry to be correct. We part with Jack Lavin and his team with mixed emotions, as we know that the future is bright for Arrow and we had hoped to accomplish more together. However, the company has found a great home within Sallie Mae that will provide significant opportunity for growth for the Arrow team. We hope to have future opportunities to work with the Arrow team to pursue mutual business interests as they continue to grow the company.”
Arrow Financial Services has over 40 years of experience in the accounts receivable management business and has achieved industry leadership by pursuing a business strategy of diversification across business line, asset class and stage of delinquency. Arrow also has developed a collection competency that combines industry-leading collection technology with a high-energy work environment. More information is available at http://www.arrow-financial.com.
SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading provider of education funding, managing nearly $95 billion in student loans for more than 7 million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), and offers comprehensive information and resources to guide students, parents and guidance professionals through the financial aid process. Sallie Mae was established in 1973 as a government-sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, the parent company name has changed, most recently to SLM Corporation. Through its specialized subsidiaries and divisions, Sallie Mae also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical products and services for colleges and universities. More information is available at http://www.salliemae.com. SLM Corporation and its subsidiaries, other than the Student Loan Marketing Association, are not sponsored by or agencies of the United States.
Parthenon Capital is a $1.1 billion private equity firm with offices in Boston and San Francisco. The firm focuses on providing financial backing and strategic support to middle market companies for acquisition and internal growth strategies. Parthenon Capital has a particular expertise in the following industries: Business/Financial Services, Food & Beverage, Healthcare, Consumer Products, Value-Added Distribution, and Niche Manufacturing. For more information please visit www.parthenoncapital.com
Statements in this release referring to expectations as to future earnings and operations, and other future developments are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks, uncertainties and other factors that may cause the actual results to differ materially from such forward-looking statements. Such factors include, among others, the ability to successfully integrate operations, the impact of competitors’ responses, changes in terms of student loans and the educational credit marketplace arising from the implementation of applicable laws and regulations, and from changes in such laws and regulations, and changes in the demand for educational financing or in financing preferences of educational institutions, students and their families.
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