Non-Standard Finance has announced that it has agreed to acquire George Banco from its existing shareholders for an enterprise value of £53.5million, payable in cash. Completion is expected in September 2017 and the acquisition is expected to be earnings enhancing in the first full year following completion.
Having launched in April 2014, George Banco has grown rapidly to become the number two player in the UK’s growing guaranteed loans market, with a total net loan book of approximately £30m. As part of a larger Group, we believe there is scope to continue to develop the business further and to grow profits substantially.
To finance the acquisition and refinance all of the Group’s existing debt facilities, as well as to provide additional funding to support future growth, NSF has secured a new £175m term loan facility (the ‘Term Loan’), provided by a group of institutional investors, led by Alcentra Limited. The new six-year loan bears an interest rate of LIBOR plus 725 basis points per year with interest payable every six months. The same investors have also agreed to provide an additional committed facility of up to £50m under the same terms as the Term Loan. In addition, the Group has also secured a new £35m revolving credit facility (‘RCF’) provided by Royal Bank of Scotland.
Commenting on the acquisition and refinancing, John van Kuffeler, Group Chief Executive said”George Banco represents a transformative acquisition for the Group, putting NSF into the clear number two position in the fast-growth guaranteed loans segment. Complementing our existing TrustTwo brand, George Banco provides us with real scale and an opportunity to grow even faster. With leading positions in each of our chosen segments, we now have a stable, long-term funding platform from which we can finance our growth plans. We will continue to seek strategic opportunities in the UK’s non-standard finance sector that meet our stringent criteria for growth and return on assets.”