S&P Global Analyzes a Potential Deal Between Kabbage and OnDeck

Kabbage is reportedly considering an acquisition of small business online lender OnDeck; S&P Global analyzes a potential merger between the two firms which has high value deal prospects including combined 2016 SME loan originations of $3.82 billion, costs savings from similar balance sheet and securitization funding sources, and similar success in technology licensing partnerships, overall resulting in increased margins, earnings and more competitive terms to borrowers; the valuation metrics and negotiation factors are the main constraints to a potential deal; the minimum enterprise value reported by S&P Global is $291.7 million which is below its current market cap of $372.4 million and far below its original IPO valuation of $1.3 billion; key factors to watch for 2017 will be OnDeck’s forecasted EBITDA and fundraising obtained by Kabbage.  Source