Nova Ljublj. S Regulatory News (NLB)

Date: 30 November, 2023

NLB to acquire Summit Leasing, accelerating the realisation of NLB's ambitions in the strategically important leasing segment

Pursuant to the provisions of the Rules of the Stock Exchange, Article 17 of the Regulation (EU) No. 596/2014, and Article 130 of the Market in Financial Instruments Act (ZTFI-1), Nova Ljubljanska banka, d.d., Ljubljana with registered office: Trg republike 2, 1000 Ljubljana, hereby publishes the following notice:

On 30 November 2023, Nova Ljubljanska Banka, d.d. Ljubljana ("NLB") entered into a sale and purchase agreement to acquire a 100% shareholding in SLS HOLDCO, holdin?ka dru?ba, d.o.o., the parent company of Summit Leasing Slovenija d.o.o., and its subsidiaries ("Summit Leasing") from funds managed by affiliates of Apollo Global Management Inc. ("Apollo Funds") and the European Bank for Reconstruction and Development ("EBRD").

Summit Leasing is a leading provider of auto finance in Slovenia. As of 30 September 2023, Summit Leasing had consolidated gross receivables of c. EUR 890 million, which included EUR 635 million related to the used and new vehicle segments in Slovenia and, through its wholly owned subsidiary Mobil Leasing d.o.o., gross lease receivables of c. EUR 120 million in Croatia. Summit Leasing is also a leading provider of point-of-sale consumer finance in Slovenia, recording c. EUR 95 million gross receivables as of 30 September 2023.

Summit Leasing has a vast network of over 750 dealers in Slovenia and Croatia, as well as over 550 points-of-sale in consumer finance in Slovenia. At the end of 2022, Summit Leasing managed c. 140,000 outstanding financing contracts with over 110,000 customers.

The consideration for the transaction represents a modest premium to the book value of Summit Leasing. Subject to the development of the business up until completion, the acquisition is expected to increase NLB's risk weighted assets by approximately EUR 700 million, comfortably within EUR 4 billion tactical capacity for M&A. Cost and funding synergies are expected to ensure that the transaction is earnings accretive from the first full year of acquisition, with full realisation of cost synergies targeted within a period of approximately 18 months from completion.

Completion of the transaction is subject to regulatory and anti-trust approvals and is planned for the second half of 2024.

"That the time has come for further growth of the NLB Group, albeit inorganic, should come as no surprise to anyone who has closely followed our development over the past few years. We have namely repeatedly emphasized that we are constantly monitoring market conditions and analysing potential opportunities for tactical mergers and acquisitions, that could open new opportunities or potentially even new markets to us, but above all increase added value for our stakeholders and provide our clients with additional services and solutions," stated NLB's CEO Bla? Brodnjak as the acquisition was announced.

"Leasing is one of the strategic activities of the NLB Group, so it is not surprising that we have gradually expanded this activity from the Slovenian market also to the North Macedonian and Serbian markets. We believe that leasing will become a significant part of the Group. It is planned that in its mature phase, it will contribute more than EUR 1 billion to the total assets of the Group, with the newest acquisition significantly accelerating this ambition. Our goal is for our leasing companies to become the leaders in the field of movables across our region and to play an important role in mobility in the markets of our presence. Summit Leasing's extensive dealer network in Slovenia will complement our digital and direct model and therefore provide the enlarged business with an omnichannel distribution platform that will be well positioned for future growth," further emphasized NLB's CEO. 

"Summit Leasing is a leader in the leasing market in Slovenia with a firm commitment to providing services of the highest standards to its vendor partners and customers. Since its inception in 2000, the company has undergone an amazing journey of profitable growth, including tripling its balance sheet since 2017. Today represents yet another important milestone in Summit Leasing's development. We are excited about the planned acquisition of Summit Leasing by NLB and we are convinced that we will continue to thrive as part of one of the region's largest financial groups. We recognise that NLB shares Summit Leasing's commitment to and passion for innovation and excellence, and we are looking forward to a fruitful partnership that we believe will benefit our customers and vendor partners. On behalf of the management of Summit Leasing, I also wish to personally and sincerely thank our shareholders Apollo Funds and EBRD for their support, focus, guidance and commitment to the business over the past years," stated Mitja Otorepec, CEO of Summit Leasing.

NLB has been advised on the transaction by Deloitte UK Corporate Finance (financial adviser); Deloitte CE South (due diligence adviser); Kav?i?, Bra?un & Partner (legal adviser); and Kinstellar (legal adviser).

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