Blue chip customer base
is pull factor in purchase of Masterlease UK business. Liz Bury
reports.
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By GlobalData
Investec
completed the deal to acquire Masterlease in six weeks flat last
year, after stepping in at the last minute when a previous bid fell
through.
GE Capital was among the
companies rumoured to be looking at the business which had been
courting the market for two years.
Ironically, the deal was
signed and sealed in super-quick time after negotiations had
dragged on for many months.
As part of the Investec deal,
the operations are being outsourced to Leasedrive Velo, which will
virtually triple its managed fleet size from 15,200 to more than
40,000.
Investec chief executive,
Mike Francis said: “Leasedrive Velo was the right fit. It will do
the front end prospecting and we will fund the
receivables.
“We won’t be taking a
significant level of residual value risk or service risk. The car
market would have to fall a long way. It’s a broker,
almost.”
Investec showed its appetite
for leasing acquisitions with the purchase of Universal Leasing’s
portfolio and Leasedirect Finance in March 2010. It now employs 170
staff in its asset finance businesses.
“We see the market as an
opportunity,” Francis said.
“We have looked at several
other deals and said ‘no’. We won’t buy a book with heavy bad
debt.
“There has to be good
economic and strategic reasons for the bank.”
Masterlease’s high-quality
customer base, which includes corporate customers like Marks &
Spencer, was particularly attractive because of the cross-selling
opportunities it affords.
“We haven’t bought
Masterlease UK, we’ve bought its customer base and the systems,”
Francis said.
“The customer base is very
attractive and the bad debt is negligible.”
Investec now has 3,500
corporate customers.
Masterlease, sold by Ally
Financial (formerly GMAC), is the last but one of the Masterlease
businesses worldwide to be sold because Ally, 59% owned by the US
central government, is forbidden from owing a leasing
company.
Disposals have occurred in 14
other countries including Australia, Belgium, France, Italy,
Mexico, Portugal, and Spain, and a closure in Greece.
Leasedrive Velo is 51% owned by Lloyds Development
Capital, and 49% by its management.
