Discover to Buy Tree.com’s Home-Lending Unit for $55.9 Million
The acquisition of Tree’s Home Loan Center unit will be completed by year-end and have a “nominal impact” on 2012 results, Riverwoods, Illinois-based Discover said today in a statement.
The purchase builds on a strategy by Chief Executive Officer David Nelms, 50, to expand Discover beyond its core credit-card and payment-processing business. In January, Discover bought Citigroup Inc. (C)’s Student Loan Corp. in a $600 million deal, making it the third-biggest U.S. provider of private student loans.
“Discover is acquiring a proven operating platform that we can scale by leveraging our brand and lending expertise,” Carlos Minetti, president of consumer banking and operations, said in the statement. “This will enable us to expand our line of banking products and provide home loans to consumers.”
Discover gained 2 cents to $24.20 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have climbed 59 percent in the past year. Tree.com, based in Charlotte, North Carolina, advanced 24 cents, or 4.7 percent, to $5.40.
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