SME asset finance business hits right note
Warwickshire asset finance provider Bell Finance has been bought for £3.4m by a stock market-listed competitor.
1pm plans to merge Bell into its subsidiary Bradgate Business Finance, which it acquired in March 2016.
Bradgate, which is based in Lutterworth, Leicestershire, and Bell are specialist providers of hard asset finance solutions to a broad range of largely owner-managed businesses. Bell also provides Caterham-branded finance for kit cars.
Both businesses have access to a selected panel of funders whilst also having the ability to act as a principal funder. This approach enables them to offer a wide range of financing packages that can generate high yields and strong returns on capital.
The book of receivables for the combined business stands at approximately £20m.
Ian Smith, chief executive of 1pm, said: “This latest transaction demonstrates our ongoing commitment to delivering on our strategic objectives of building scale and maintaining our funding and broking capabilities.
“The acquisition of Bell and its merger into Bradgate creates a substantial business for the funding of hard assets required by many SME sectors and establishes a platform for further growth.”
It expects the combined business will have greater access to lower-cost funding, creating the capacity for “further, more profitable growth”.
Bell was founded in 2000 and is originating about £6.0m of new business a year. It funds the majority on its own balance sheet, with approximately 15% of deals brokered-on.
Its unaudited accounts for the year to November 2016 show pre-tax profits of £0.4m from revenues of £1.7m. Its current loan book has more than 400 live agreements, which will bring in £2.3m interest in the future.
Bath-based 1pm is paying £2.3m in cash, of which £0.3m will be released when integration milestones are met. There is a further £0.3m of deferred cash and an earn-out of £0.8m, of which three-quarters will be in 1pm shares, over the three-year period following completion.
