LAS VEGAS, June 24, 2004 (PRIMEZONE) -- Consumer Direct of America (OTCBB:CSUA) (CDA), a fast-growing mortgage provider, today announced that it has executed a letter of intent to acquire for a combination of stock and cash Tustin, CA-based Ocean West Holding Corp. (OTCBB:OWHC), a mortgage banking enterprise licensed as a mortgage bank in 38 states, and writing approximately $1 billion in mortgages annually. Closing of the acquisition, valued at approximately $5 million, is subject to the approval of the shareholders of each company, as well as other customary closing conditions for a transaction of this kind.
Chairman & CEO Michael A. Barron said, "We have been working for some months on this business combination, and believe strongly that the synergies will create a powerful marketing and funding force in the mortgage industry. On a combined basis, we will have loan volume in excess of $150 million per month with over 76 branch locations. We will have over 750 employees, and will be able to expand our banking products into many more geographic markets. We anticipate that together we will be generating cash and profits by the end of 2004."
Mark Stewart, Chairman and CEO of Ocean West stated, "Together we will greatly expand our mortgage banking profit center by adding additional warehouse banking capacity -- which in turn will give us more than enough room to double our revenue over the next six months. We expect to be banking $80 million per month later this year, which should yield between 1% -- 2% of that volume in additional revenue per month."
For 2003 CDA had closed-loan volume of $815 million, which generated $8.9 million of revenue; Ocean West had closed-loan volume of $1.1 billion, which generated revenue of $14 million. The new Consumer Direct of America would account on a pro forma basis for over 8,000 loan transactions in 2003.
Subsequent to the acquisition, Ocean West will be a wholly-owned banking subsidiary of Consumer Direct of America, and will continue to do business under its current name and from its current locations, although both companies will examine redundancies to maximize the effects of consolidating the two businesses. Barron will remain Chairman and CEO of Consumer Direct of America; Stewart will continue as President of Ocean West and will join CDA's Board of Directors.
Under the terms of the agreement, CDA will acquire all of the outstanding common stock of Ocean West Holding Corp. and each Ocean West shareholder will receive approximately one share of CDA stock (the "Exchange Rate") for each ten Ocean West shares held. Based on the Exchange Ratio, CDA expects to issue approximately 1,250,000 new shares of restricted common stock.
About Ocean West
Ocean West Holding Corp. (OTCBB:OWHC) is a wholesale and retail mortgage banking company primarily engaged in the business of originating and selling loans secured by real property with one to four units. The company offers a wide range of products and historically, targeted high quality, low risk borrowers. The company recently expanded into the higher risk sub-prime market to assist in efforts to diversify lending practices. Income is generated from loan origination fees and from gains from sales of mortgage loans on the secondary mortgage market and to private investors. Ocean West closed $1.1 billion in loans in 2003.
About Consumer Direct of America
Consumer Direct of America (OTCBB:CSUA) is a fast-growing provider of residential mortgages. It employs over 300 people, 150 of whom are residential mortgage real estate brokerage professionals who have closed loan volume of over $815 million and $50 million in real estate sales for the year ended December 31, 2003. Consumer Direct operates 54,000 sq. ft. of telesales and branch office space. Emerging as a national leader in mortgage banking/ brokerage and ancillary services, the company plans to have 10 regional hubs across the United States by the end of 2005. The company's core competence in direct-to-consumer marketing technologies and methods results in efficiency rates that are up to 150 percent higher than industry averages. Consumer Direct also leverages its direct marketing expertise to provide third-party direct marketing services to clients. For more information, please visit the company's website at www.cdofamerica.com.
Statements in this press release other than statements of historical fact, including statements regarding the company's plans, beliefs, and estimates as to projected results and market size are "forward-looking statements." Such statements are subject to certain risks and uncertainties, including factors listed from time to time in the company's SEC filings, and actual results could differ materially. These forward-looking statements represent the company's judgment as of the date of this release. The company disclaims, however, any intent of obligation to update these forward-looking statements.