Financials

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Friday, April 30, 2004

WATERLOO, Iowa - Although the VGM Group has sold its leasing and financial services business to a Minnesota bank, all staff and operations will remain intact at the Waterloo office.

In a novel arrangement forged by VGM and Wayzata, Minn.-based TCF Financial, the VGM Financial Services Division becomes property of subsidiary TCF Leasing, but the 40 employees in the division - including Financial Services President Jim Phillips - will stay on premises and continue to operate in much the same way. Terms of the sale include a 15-year agreement to co-market financial products and a long-term office lease that allows for expanding staff and building space at Waterloo.

“In a way, it is as if VGM Finance has gone from being a fast-growing division of VGM to being one of our best customers…located right here in our building,” CEO Van Miller said in a letter to employees.

Founded by VGM in 1991, Financial Services steadily has grown to $100 million in transactions last year. That escalating level of demand, combined with TCF’s interest in entering the healthcare financing market became key motivators for the sale, said Jim Walsh, president of VGM Management.

“Demand for capital reached a point where it outstripped our comfortable capabilities,” he said. “We have many divisions and we couldn’t overextend ourselves. Leasing and financing is a competitive business - you have to offer a competitive rate. Being a strictly financial organization, TCF is in a better position to do that.”

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