Filed under: Investments
Like many other financial institutions, investors are worried about the viability of CIT Group Inc. (NYSE: CIT), which is a major business lender. Of course, the stock price has plunged - and there are lots of rumors swirling.
But today there was some good news. That is, CIT has struck $1.8 billion in deals to unload its manufactured housing and home loan units. The stock is up 16% to $7.93.
There were actually two buyers. Private equity firm Lone Star Funds concurred to a $1.5 billion transaction for the home lending division. And Vanderbilt Mortgage and Finance will spend $300 million for the manufactured home segment.
These deals are certainly a massive relief. Basically, CIT can now focus on its core business - and not deal with the headaches of the consumer area.
Actually, CIT has some big-time backing. For example, Goldman Sachs (NYSE: GS) recently made a $3 billion infusion.
Yet there are still many challenges. After all, CIT has had difficulties generating profits and the credit crunch isn’t going away.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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