Insurance Taking Care of Financial Services Deals

Prospect Capital has agreed to acquire First Tower, a specialty finance company that provides consumer loans. Prospect will acquire 80.1% of the company for $266 million—composed of $110.2 million in cash and 14.5 million Prospect shares. Company management will hold the remaining 19.9% interest. Bank of America, BMO Harris Bank and Wells Fargo will serve as lenders for First Tower's new $350 million revolving credit facility.

Since the beginning of 2011, PE investors have invested in 169 companies in the Financial Services industry, according to the PitchBook Platform. Last year, 159 deals were completed, and 15 have already closed in 2012 to date. With 40% of the closed deals this year, the Insurance sector is continuing to lead Financial Services deal activity. Last year, the sector accounted for 34% of the year's activity. In 2010, Commercial Banks had the highest percentage of the yearly deal count (35%).