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Firstfolio has announced it has acquired key assets of business equipment financing specialist LeaseChoice, a deal that will diversify the listed mortgage and financial services group’s earnings.
Firstfolio will acquire the LeaseChoice business name, website, origination systems and associated trademarks, as well as access to LeaseChoice’s wholesale funding arrangements.
Firstfolio said the acquisition was likely to be earnings accretive in the first 12 months, contributing up to $750,000 to the group’s earnings before interest, taxes, depreciation and amortization in that period. Income would be generated in the short term from new transaction fees while assets originated under Firstfolio management would begin to generate long-term income.
The $2.4 million transaction will include an upfront cash payment of $1.75 million, a $500,000 share issue and a payment of $150,000 deferred until 31 December.
“Diversification of product and client portfolio has been a major goal of Firstfolio, and we have always been opportunistic in adding new financial service components that could benefit from our existing distribution platform,” said Firstfolio chief executive Mark Forsyth.
Firstfolio would help LeaseChoice expand into adjacent segments such as the SME market, he added.
“LeaseChoice has a strong distribution network through introducer relationships such as Mortgage Choice, The Rock Building Society and AMP Financial Planning, and blue chip government and institutional clients. Its lending proposition to these businesses and its specialised focus on business equipment made it a compelling proposition for us as we continue to grow our business in Australia,” Forsyth said.
The LeaseChoice origination team will join Firstfolio while LeaseChoice founder Kirk Tsihlis will remain with the business, focusing on introducing or enhancing existing wholesale funding arrangements on an exclusive basis in Australia.
