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LendingTree Gets Smart, Buys Competitor

Online lender grabs GetSmart.com from Providian.

LendingTree, Inc., a Charlotte, N.C.-based online lending exchange, will soon be acquiring key assets-and the brand name-of financial services marketplace GetSmart.com (San Francisco).

Expected to be finalized in December, the acquisition will blend the best practices and technologies of two companies that have both specialized in providing online exchanges that link consumers with lenders and other businesses, according to a company spokesperson. LendingTree will acquire GetSmart from Providian Financial Corp., which has owned the company since 1999.

LendingTree is an online lending exchange composed of more than 200 banks, lenders, and brokers. It has two main divisions of its business: a consumer loan exchange, and a real estate exchange linking consumers with approximately 10,000 realtors.

GetSmart.com has a business model similar to the consumer loan exchange division of Lending Tree; it links consumers with lenders via an online exchange service. Like LendingTree, GetSmart has been offering consumers a variety of loan products, including mortgages, home equity loans, credit cards and auto loans.

LEVERAGING LEND-X

On the technological side of the deal, the combination will blend the best of each company's technologies-a blending that will be helped by the fact that they each have similar systems.

"Essentially, we plan to migrate the Get-Smart technology onto our technology platform," says Doug Lebda, the founder and CEO of LendingTree. "We've got very similar technology. We'll look at aspects of each technology that works best, and that's what we'll continue to use."

Currently, LendingTree uses Lend-X technology for its online lending platform, and the company plans to continue with this platform as it brings GetSmart on board. Lend-X is a patented online lending technology that was created by Lebda and Rick Stiegler, chief technology officer.

After the acquisition, LendingTree expects to maintain relationships with the approximately 100 lenders in the GetSmart network, as well as offer the GetSmart platform to the more than 200 lenders on the LendingTree exchange. Lebda also expects that there could be some cross-selling of LendingTree's real estate business to the Get-Smart consumer base. "We think this is a great opportunity to aggregate significant amounts of consumer demand for our lender partners and add value to the GetSmart channel by exporting various best practices from LendingTree," Lebda says.

Some of these best practices, according to Lebda, are LendingTree's ability to create and maintain lender relationships, build a leading brand name and attract a significant volume of customers, as well as its advanced filtering technologies.

"There are lots of things we do really well that we can bring to GetSmart," says Lebda.

FUTURE PARTNERSHIP?

For its part, Providian sees the divestiture as an opportunity both to sell a non-strategic asset and, perhaps, to cross promote products with LendingTree in the future. "Get-Smart is a brand which, on a stand-alone basis, is a non-strategic asset for Providian," says Warren Wilcox, Providian's vice chairman of marketing and strategic planning. "We are excited to have entered into this transaction with Lending Tree, which may also allow for the opportunity to cross promote our products and services in the future."

Once the acquisition is completed, Lebda is hopeful that the combination of these two companies will benefit both lenders and consumers. "We think this is going to be a great win for lenders, for consumers, and for LendingTree," says Lebda.

Since its inception in 1996, more than 10 million consumers have accessed LendingTree's exchange through its Web site-and through online and offline partners-and it has facilitated more than $55 billion in closed loans.

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