Banking group hits the road with £4.1m vehicle finance house takeover
Arbuthnot Latham has today announced the £4.1m takeover of vehicle finance and related services business Asset Alliance Group Holdings.
Asset Alliance focuses, predominantly, in the truck and trailer and bus and coach markets, operating from five locations around the UK.
It has more than 4,000 vehicles under management and, as at August 31, 2020, had assets for lease with a net book value of approximately £150m.
Arbuthnot Latham, which has a regional office in King Street, Manchester, and is part of the Arbuthnot Banking Group, has bought the Asset Alliance shares from CS Capital Partners III LP, and a small number of other investors which include the senior management of Asset Alliance.
Completion is expected to take place within three months.
The third-party funding of Asset Alliance at completion, which is associated with the assets available for lease, and includes a revolving credit facility of approximately £140m, is expected to be refinanced by Arbuthnot soon after the completion date.
Asset Alliance had adjusted net assets of £8.1m as at August 31, 2020. It reported an EBITDA of approximately £7.2m for 2019 and is expecting to record £2.3m for the same measure in 2020.
This is anticipated to increase to £5.5m in 2021.
In addition, this acquisition should generate a net negative goodwill accounting adjustment of £1.7m. Therefore, the transaction is expected to be earnings accretive to the group in the year ending December 31, 2021. The group anticipates Asset Alliance transaction costs of approximately £0.8m will be recognised in its 2020 trading results.
The consideration for the purchase of Asset Alliance’s share capital and the refinancing of the third-party funding will be satisfied by cash from the group’s own resources.
Willie Paterson, Asset Alliance chief executive, and his management team who collectively have many years of experience within the leasing and banking industries, will remain in place to help deliver the business’s growth plans.
Sir Henry Angest, chairman and CEO of Arbuthnot Banking Group, said: “We are delighted to welcome Willie and his team to the group. This acquisition of Asset Alliance is complementary to our strategy of diversification and developing businesses in the specialist commercial finance sectors.
“Their experienced management team have built the foundations for future growth and now that it will no longer be constrained by third party funding limits I look forward to Arbuthnot enabling this business to grow and prosper in the future.”
