Morses Club, the UK’s second largest home collected credit lender, has announced that it has acquired Shelby Finance and certain assets of CURO Transatlantic trading as WageDayAdvance out of administration. The total consideration for the acquisition is approximately £8.5m paid in cash, 50% on completion and the balance over 5 months (depending on the final valuation of the acquired loan book).
CURO is a provider of online loans in the non-standard credit market. Under the terms of the transaction, Morses Club is acquiring all the existing infrastructure of CURO including its decision platform, call centre, and online lending capabilities. All of CURO’s current employees will become employees of Shelby Finance. The gross receivables (before any collection provisions), which exclude all the CURO TA bad loans identified by the Company, amount to approximately £19m.
Morses Club says that the acquisition fits well with the company’s stated strategic priority to increase its online offering in response to growing demand. The acquisition also adds a sizeable customer base of around 50,000, increasing the Company’s overall customer base by over 20%.
While it is not expected to add to earnings in the first 12 months, Morses Club’s management is confident that the acquisition will make a positive contribution to earnings.
Paul Smith, Chief Executive Officer of Morses Club, said “This exciting acquisition of such a well-established online lending business represents a significant escalation for Morses Club’s product diversification strategy. The range of online lending products that we will deploy through the newly acquired platform will exclude any form of payday-style lending and the trading style will be dropped. The loan products will fit neatly within the existing Dot Dot Loans strategy, in terms of loan duration, affordability and forbearance. This acquisition, alongside those recently announced in our core HCC market, reinforces our plans to build a digital platform to meet the evolving needs of our customers across the UK, whether online or in the customer’s home.
“We look forward to working with the new teams to maximise the expertise that they bring to deliver best in class service and continue to broaden Morses Club’s capabilities and product offering in the non-standard credit space.”