Capital One 2012 Annual Report Download - page 178

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NOTE 2—ACQUISITIONS
We regularly explore opportunities to enter into strategic partnership agreements or acquire financial services
companies and businesses to expand our distribution channels and grow our customer base. We may structure
these transactions with both an initial payment and subsequent contingent payments tied to future financial
performance. In some partnership agreements, we may enter into collaborative risk-sharing arrangements that
provide for revenue and loss sharing.
2012 Acquisitions
ING Direct
On June 16, 2011, we entered into a purchase and sale agreement with the ING Sellers, under which we would
acquire ING Direct. On February 17, 2012, we closed the acquisition of ING Direct, which included (i) the
acquisition of all the equity interests of ING Bank, fsb (ii) the acquisition of all equity interests of each of WS
Realty LLC and ING Direct Community Development LLC and (iii) the acquisition of certain other assets and
the assumption of certain other liabilities of ING Direct Bancorp. Headquartered in Wilmington, Delaware, ING
Direct was the largest direct bank in the United States. The ING Direct acquisition strengthened our customer
franchise and added over seven million customers and approximately $84.4 billion in deposits to our Consumer
Banking segment.
The aggregate consideration paid by us in the ING Direct acquisition was approximately $6.3 billion in cash and
54,028,086 shares of Capital One common stock with a fair value of approximately $2.6 billion as of the
acquisition date. We used current liquidity sources as well as proceeds from public debt and equity offerings
described below to fund the cash consideration.
In the third quarter of 2011, we closed a public offering of four different series of our senior notes for total cash
proceeds of approximately $3.0 billion and a public underwritten offering of 40 million shares of our common
stock, subject to forward sale agreements. We settled the forward sale agreements entirely by physical delivery of
shares of common stock in exchange for cash proceeds from the forward purchasers of approximately
$1.9 billion on February 16, 2012.
We also incurred transaction costs related to the ING Direct acquisition totaling $63 million as of December 31,
2012, of which $38 million was recognized in 2012 and reported in our consolidated statement of income as a
component of non-interest expense. These transaction costs do not include other merger-related expenses, such as
integration costs.
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