By Lisa Kerner
Charlotte, N.C., April 16 - An investor group led by J.C. Flowers & Co. entered into a definitive agreement to purchase SLM Corp., known as Sallie Mae, for $60.00 per share in a transaction valued at about $25 billion.
Following completion of the transaction, J.C. Flowers and private equity firm Friedman Fleischer & Lowe will invest $4.4 billion and own 50.2% of Sallie Mae, while Bank of America and JPMorgan Chase will invest $2.2 billion each for a 24.9% stake in the company.
Sallie Mae's independent board members have unanimously approved the agreement and recommended that its shareholders approve the agreement, according to a company news release.
"We are pleased to invest in Sallie Mae and help provide increased liquidity, stability and financial strength," J.C. Flowers managing director J. Christopher Flowers stated in the release.
Sallie Mae's current management will continue to lead the company, which will continue to be based in Reston, Va.
Bank of America and JPMorgan agreed to provide debt financing for the transaction and to provide additional liquidity to Sallie Mae before the closing, expected in late 2007.
Sallie Mae is the nation's leading provider of saving- and paying-for-college programs.
J.C. Flowers is a New York-based private equity firm.
Friedman Fleischer & Lowe is a San Francisco-based private equity firm.
| Acquirer: | J.C. Flowers & Co.-led investor group
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| Target: | SLM Corp.
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| Transaction total: | $25 billion
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| Payment per share: | $60.00
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| Announcement date: | April 16
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| Expected closing: | By the end of 2007
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| Stock price for target: | NYSE: SLM; $46.76 on April 13
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