1PM continues its march towards significantly growing its portfolio, with the purchase by its wholly-owned subsidiary, Academy Leasing Limited (“Academy”), of a book of receivables for a consideration of £1.6 million, satisfied in cash on completion.
The book of receivables comprises circa 1,000 finance leases with SME customers for vehicle fleet equipment. The gross receivable value of the book is £2.03 million with an effective yield of 17 percent.
Prior to the acquisition, Academy provided a debt collection service in respect of the book and is therefore operationally familiar with the underlying customers, assets and lease agreements. Acquiring the book provides Academy and 1PM’s recently acquired fellow subsidiary, Bradgate Business Finance Limited, with the opportunity to cross-sell contract hire, lease and hire purchase of fleet and commercial vehicles into this new customer base.
The purchase consideration was financed entirely through headroom in Academy’s block funding facilities. Mike Nolan, 1PM’s Chief Strategic Officer, said, “As well as adding to the Group’s lease portfolio, generating additional cash and profit over the next three years, this acquisition provides a great opportunity to introduce our existing product range to a new group of customers.”
Group CEO, Ian Smith, added, “The cross-selling leverage that can be pursued as a result of this latest earnings-enhancing transaction demonstrates the added value of 1PM’s acquisition strategy. The Board is pleased to have completed this transaction in the current financial year as part of its intent to build a significant asset finance and business loans group through a combination of strong organic growth and carefully selected acquisitions.”