LONDON (Alliance News) - Non-Standard Finance PLC on Friday said it has agreed to acquire Everyday Loans Holdings Ltd from Secure Trust Bank PLC for an enterprise value of GBP235.0 million.
Non-Standard Finance, which was established to acquire consumer finance businesses, said it will fund the deal with a trio of measures. First, 188.2 million new shares will be sold at 85.0 pence each in a placing and open offer, then new shares will be issued to Secure Trust Bank, and finally new debt will be put in place.
The deal is seen as complementary to Non-Standard Finance's acquisition of Loansathome4u from S&U PLC in July, which enabled it to enter the home credit market.
Separately, Secure Trust Bank confirmed the deal and said it stands to receive GBP107.0 million in cash and GBP20.0 million in Non-Standard Finance shares. The enterprise value includes intercompany debt of GBP108.0 million, which will be paid off by Non-Standard Finance on completion of the deal in the first quarter of 2016.
"The unsolicited approach from Non Standard Finance for the Everyday Loans Group presented an attractive option to accelerate our strategy of proportionately reducing our exposure to personal unsecured loan products whilst we invest in our strongly growing Motor, Retail and SME lending activities," Paul Lynam, Secure Trust's chief executive, said in a statement.
Secure Trust expects to make a profit after tax of no less than GBP115.0 million, and will retain its Moneyway personal lending business. Arbuthnot Banking Group PLC, which owns 51.9% of Secure Trust, took note of the transaction.
"This disposal allows Secure Trust Bank and Arbuthnot Banking Group to capitalise future profits and thus strengthen the business and support further growth," Henry Angest, chairman and chief executive of Arbuthnot, said in a statement.
Non-Standard Finance said the purchase of Everyday Loans gives it an established branch-based lending business and a platform for entry into the guaranteed loans market. Everyday Loans is the largest non-bank, branch-based unsecured consumer lender in the UK, the company said.
"Everyday Loans is a strong and differentiated business for which we have exciting expansion plans. By applying our expertise and management skills we intend to grow its branch network; widen its customer base; and accelerate growth in its guaranteed loans business," John van Kuffeler, the chairman of Non-Standard Finance, said in a statement.
The acquisition of Everyday Loans is classed under a reverse takeover.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Secure Trust (STB)
Arbuthnot (ARBB)