MANHATTAN BEACH, Calif. -
The CU bought Navicert Financial, which does business as Nix Check Cashing, for $45 million.
Pending approval by Navicert shareholders, Kinecta FCU will acquire 55 Nix Check Cashing retail outlets in the greater Los Angeles area through its wholly owned subsidiary, Kinecta Alternative Financial Solutions. Navicert, based in Carson, Calif., will change its name to Kinecta Alternative Financial Solutions and will operate as a credit union service organization and wholly owned subsidiary of Kinecta. It will continue to operate under the DBA Nix Check Cashing.
In 2006, Nix had more than 5 million customer visits, totaling more than $1.4 billion in annual transaction volume.
The deal follows an agreement in June by Wescom CU, in nearby Pasadena, Calif., to acquire eight local check cashers known as Area Check Cashing Centers.
Simone Lagomarsino, Kinecta's president and CEO, told Credit Union Journal the deal represents the CU's entry into alternative financial products.
"It gives us a chance to have a broader product range and help people become credit union members. We are excited about it," she said. "We will offer Nix customers lower fees, which will help save them money. We have ideas and programs for the future we are very excited about. The competitors are going to look at what we are doing and will have to lower their fees to be competitive. We think this will have an impact on the community."
Lagomarsino said Kinecta's board and management have been doing research on serving the underserved for more than a year. "It is something we are very passionate about. The opportunity with Nix Check Cashing came up several months ago. As we began talking with them, we learned about their culture and saw their reputation in the community."
Tom Nix, the president and CEO of Navicert, will become a senior vice president of Kinecta and will be president of Nix Check Cashing. Joining Nix will be Darline Gavin, SVP of operations, and Randall Dotemoto, SVP, chief financial officer and general manager. The three individuals have an average of 30 years of experience at Nix and have signed multi-year agreements to continue with Kinecta and Nix Check Cashing following the purchase. The CU said all 418 Nix's employees will become Kinecta employees.
Said Lagomarsino: "We're really excited about the three top people staying on for a few years. They will give us a better understanding of alternative financial services, and we'll work with them to help them understand the credit union industry."
Kinecta, the sixth largest CU in California, said each of Nix's 55 branches will retain the Nix name and structure in the near term.
Over time, the credit union said, Nix branches will be converted to full-service Kinecta FCU branches, and Kinecta products and services will be available to Nix customers via on-line banking, telephone, voice response and ATMs.
In addition, Kinecta branches eventually will have an expanded product array including alternative financial solutions currently offered by Nix.
"The culture of both organizations line up very well," Lagomarsino said. "We are very focused on serving our members and helping them with all their financial needs. Tom Nix has been a leader in the financial services industry. He has worked to get legislation passed to limit fees charged by check cashers, and requiring them to post fees prominently at every location. They have mystery shoppers who go in to maintain high service standards, and we have high service standards."
