Acquisition

25th Sep 2006 10:12

Banco Santander Central Hispano SA25 September 2006 MATERIAL FACT Santander Consumer has reached an agreement to acquire 90% of Drive Financial("Drive") in the U.S.A. for US$ 651 million in cash, representing a multiple of6.9 times the estimated earnings for 2006. It is estimated that at the time ofclosing, the operation will generate goodwill of US$ 540 million. Under the agreement, the price paid by Santander could increase by a maximum ofUS$ 175 million, if the company achieves certain earning targets set for years2007 and 2008. Drive is one of the leading auto financing companies in "subprime" customersegment in the United States. Based in Dallas, Texas, it is present in 35states, with approximately 50% of its activity concentrated in Texas, California, Florida and Georgia. Drive has around 600 employees and its productsare distributed through more than 10,000 auto dealer partnerships. To date, 64.5% of Drive was owned by HBOS plc and 35.5% by its management team.Following the acquisition by Santander, the present Chairman and COO of Drivewill act as Chief Executive Officer, maintaining ownership of 10% of thecompany, a percentage on which the parties have signed a series of options whichcould enable Grupo Santander to buy the additional 10% between 2009 and 2013 atprices linked to the company's earnings performance. The transaction, which will be completed in 2006 and is pending the relevantapprovals, will be immediately accretive for Grupo Santander and is expected tocontribute 1.5% to 2007 earning per share of Santander. Boadilla del Monte (Madrid), September 25, 2006 This information is provided by RNS The company news service from the London Stock Exchange

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