Jason T Hesse finds that
private equity firm AnaCap remains committed to
expanding.
AnaCap Financial Partners
announced last month that it was buying Cattles Invoice Finance
(CIF) from troubled subprime lender Cattles.
Go deeper with GlobalData
The private equity firm agreed a deal with
Cattles’ management to pay around £10.4 million (€12.1 million) in
cash, equivalent to CIF’s net asset value, and £59.6 million in
intercompany loans.
This follows on from AnaCap’s recent
acquisition of Ruffler Bank, which it merged with Base Commercial
Mortgages to form asset and property finance bank Aldermore, as
reported in Leasing Life last month.
The latest acquisition brings AnaCap’s total
assets under management over €920 million.
AnaCap, which also owns independent IT
financier Syscap, said that it was expecting the CIF deal to close
towards the middle of this month, after being put forward for
shareholder approval at the end of August.
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By GlobalDataThe company added that CIF would receive
future funding from Lloyds TSB Commercial Finance, which is also
providing AnaCap with debt finance for the acquisition.
While CIF is expected to retain its senior
management, AnaCap’s partner of business services, Peter
Cartwright, will join its board alongside head of credit Andy Wynn,
who had previously acted as interim CFO at Syscap.
“We’re excited about the future prospects for
CIF,” said Chris Patrick, M&A partner at AnaCap. “The deal will
provide vital continuity for CIF’s staff and clients. With our
support and backing, CIF will be able to further expand its
operations in the SME market.”
Building a stronger
business
CIF was established in 1994, and
provides invoice finance facilities, including factoring,
confidential invoice finance and credit protection services to SMEs
in the UK. Operating from a network of six regional centres, CIF
advances against invoices worth more than £1 billion per year, with
facility sizes ranging from £25,000 to £4 million.
In its latest publicly-available results, for
the six months ending 30 June 2008, CIF’s unaudited results
included total income of £9 million, pre-tax profit of £1 million,
net assets of £12 million and gross assets of £106 million.
“Over recent years, we have operated
increasingly autonomously from Cattles plc, as it has focused on
consumer lending. This deal is welcome news for the clients and
staff of CIF, and we are excited by the opportunity to build a
stronger business with the support of an experienced parent,” Doug
Crawford, chief executive of CIF, said.
“The invoice finance industry is enjoying
unprecedented growth in the current financial climate, and we
intend to capitalise on the opportunity that this provides to fund
more of the right kinds of deals, and develop more tailored
products and services in line with the changing needs of the
market,” Crawford added.
This is the latest of a host of acquisitions
by AnaCap this year, which included Ruffler Bank and Mediterranean
Bank, a Maltese private bank.
In June, the private equity firm announced
that it had raised a new financial services fund, from investors
including Goldman Sachs, Allianz, Honeywell and others. The new
fund, of €575 million, is nearly twice the size of AnaCap’s first
fund, which had raised €300 million in 2006.
At the time, Amber Hilkene, director of
corporate development at AnaCap, said that the new funds would
enable AnaCap to “capitalise on the wide range of opportunities
resulting from the turbulence of the last two years”.
Through 2010 and onwards, AnaCap said that it
would continue its existing investment strategy, and focus on
making investments in mid-sized financial services companies across
Europe.
PE market boom
Over the past 12 months, private
equity (PE) firms have become increasingly interested in financial
services firms, where they believe good deals can be scooped
up.
Tony Mallin, who, before setting up his own PE
firm, Star Capital, was the former chairman of Leaseurope and the
FLA, told Leasing Life earlier this year that his business
was ready to invest “around £100 million” into one or two companies
in the asset finance industry.
Another recent PE deal, in August, saw LDC,
the private equity arm of Lloyds Banking Group, invest €9.8 million
into international test equipment lessor Microlease.
LDC, which had already backed a €34.5 million
MBO by Microlease’s director Nigel Brown in 2006, said the
additional funds would help the company continue in its growth
ambitions.
