Auto Experience Inc has announced its interest in acquiring Consumer Portfolio Services (NASDAQ: CPSS) sending CPSS’ stock surging almost 60% premarket.
Auto Experience said it is interested in an all-cash transaction that would value the company at $135 million, an acquisition that would “nearly double the current value” of the Nasdaq-listed company.
CPSS is an independent speciality finance company based in Irvine, California that provides indirect vehicle financing to consumers.
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Auto Experience President and Chief Executive Officer, Samuel M. Ellis said: “leveraging our strategic and operational experience in auto financing and enterprise technology will create a strong national player that already has a toe-hold in more than 8,000 automobile dealerships across the U.S.”
The news has seen CPSS’ stock price jump over 59.16% premarket to $5.30 after closing Wednesday at $3.33. In the last six months, its share price has gained almost 140%.
Ellis went on to say that “CPS is significantly undervalued based on a range of performance measures and upside growth opportunities, and we believe our proposed acquisition would be materially beneficial to shareholders and, over the longer run, to consumers and dealers.”
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