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Deal joins student loan providers

--Collegiate Funding Services operates a Pinellas Park call center that employs 160 people.

By HELEN HUNTLEY
Published December 20, 2005

JP Morgan Chase Bank has a $663-million deal to acquire Collegiate Funding Services, and with it the company's Pinellas Park call center.

The bank is willing to pay $20 a share for CFS so it can expand its presence in the student loan business.

The companies said they expect to maintain their existing locations, which include a Gateway Centre Business Park facility that employs 160 people. Collegiate Funding spokeswoman Ann Collier said it's too early to know whether any changes might be in store for the Pinellas Park facility, which the company opened nearly six years ago.

"Our plan is to build this into the premier student loan business in the country," she said. "One reason this acquisition makes so much sense is that we have a lot of the infrastructure that Chase does not have. It is a great marriage between two companies."

Chase Education Finance originated $7.9-billion in student loans last year, while Collegiate Funding originated $4.4-billion. In addition, Collegiate Funding services about $12-billion in student loans.

The combined company will have its headquarters in Fredericksburg, Va., where Collegiate Funding is based. Collegiate Funding also has operations in Jackson, Miss., and Boston, while Chase's student loan business is based in Indianapolis. CFS president J. Barry Morrow will become president of the combined business.

The deal, which is expected to close during the first quarter of 2006, is still subject to approval by regulators and CFS shareholders. The company's largest shareholder, Lightyear Fund L.P., has agreed to vote in favor of the transaction.

--Helen Huntley can be reached at huntley@sptimes.com or 727 893-8230.

[Last modified December 20, 2005, 01:49:07]