In order to grow, New Jersey businesses need to expand their customer base. The more people purchasing goods or using a service, the more money a company can make. Sometimes in order to expand, the company needs to enter into a new market, which can be difficult. Alternatively, a company can acquire an existing business in its desired new market. By acquiring a new business, the company can take advantage of connections that the previous business already made and will have an existing customer base. An acquisition can make the process of moving into a new market much easier.
A New Jersey bank — BankAsiana — is being acquired according to a recent announcement. The bank has two New Jersey branches and one New York branch and $207 million in assets. It is being purchased by Wilshire Bancorp Inc. — based in California — for $32.5 million. This move mirrors that of other Korean-American banks that have been expanding throughout the country over the last year.
Wilshire Bancorp Inc. is the parent company of Wilshire State Bank which operates in Koreatown in Los Angeles. BankAsiana is a small Korean-American bank and is seen as a jumping board for Wilshire to expand on the East Coast. Wilshire’s CEO has claimed that the acquisition will help move into the company into a faster growing market and diversify the company’s loan portfolio. This acquisition will double Wilshire’s presence on the East Coast.
Business deals like this one are very complex. The companies will need to manage the legal requirements of more than one state while fulfilling any federal banking regulations. Even before this deal was announced it is likely that the companies engaged in hours of negotiation over every detail of the transaction, which is necessary to ensure the best possible outcome for each company.
Source: Los Angeles Business Journal, “Wilshire Bancorp Makes East Coast Acquisition,” James Rufus Koren, June 10, 2013