Foothill Capital Acquires Paragon Capital Corporation

Furniture World Magazine

Foothill Capital Corporation, a subsidiary of Wells Fargo & Company (NYSE: WFC) said it has acquired Boston-based Paragon Capital Corporation. Created in 1997 as a joint venture between The Ozer Group, a retail disposition and valuation firm, and Foothill Capital, Paragon Capital specializes in asset-based financing to the retail industry. Foothill Capital owned 30 percent of Paragon, and has now acquired the remaining 70 percent. Terms of the purchase were not disclosed. The two companies signed a definitive agreement on December 8, 2000 and the purchase became final on December 15, 2000. Foothill will combine its retail finance operations with Paragon to form a new subsidiary, Wells Fargo Retail Finance, Inc., which will provide secured asset-based credit facilities and other financial services to retailers nationwide. As of November 30, 2000, Foothill and Paragon combined had approximately $1.8 billion in loan commitments to retailers. The new subsidiary will be based in Boston, with additional offices in located in Philadelphia and Los Angeles. "We are leveraging the strengths of both Foothill and Paragon to create a focused, national company, providing asset-based loans and other services to retailers," said Kent Dahl, executive vice president at Foothill Capital, who will also be the executive managing director of the new Wells Fargo Retail Finance, Inc. ``Our goal is to benefit our clients with this unique, unified approach of providing a full spectrum of products targeted to the retailing industry.'' Joining Dahl at Wells Fargo Retail Finance will be co-chief operating officers and senior managing directors, Steven Cole, senior vice president and regional credit manager in Foothill's Boston office, and Andy Moser, president and chief operating officer of Paragon. "We have worked very successfully with Foothill Capital and are very pleased to be forming a new team with such a highly respected leader in the financial services industry,'' said Moser. ``Together, we will be a formidable competitor in providing broader financial services to the retailing industry." Stewart Cohen, Chief Executive Officer of Paragon, will return to The Ozer Group as a principal. Cohen stated, ``This is a logical next step in Paragon's evolution. We expect the Paragon team, combined with the team and resources of Foothill and Wells Fargo, will produce something very exciting and truly special. We believe that in short order they will attain market leadership, providing unparalleled value in the retail marketplace. My partners and I wish them all the best and await with great anticipation their success and growth.'' Foothill Capital is one of the largest bank-owned asset-based lending companies in the U.S. It provides secured commercial loans under a broad spectrum of lending structures to companies for growth, recapitalizations, turnarounds, and leveraged acquisitions. It is a subsidiary of Wells Fargo & Company, a diversified financial services company with $263.5 billion in assets, providing banking, insurance, investments, mortgage and consumer finance from more than 5,700 stores and the Internet (wellsfargo.com) across North America and elsewhere internationally. The new subsidary will be based in Boston and be called Wells Fargo Retail Finance. It will have $1.8 billion in loan commitments to retailers. Please call if you have any questions. James Harder Phone: 617-369-9225; Fax: 617-262-7340 E-mail: jharder@bsmg.com