Secure Trust Bank completes complex deal to acquire V12 Group
SOLIHULL-based Secure Trust Bank has finalised a complex deal to acquire the entire issued share capital and loan book of V12 Group for an initial cost of £3.5m.
The deal, which follows STB’s £20m placing in November, will also see the bank agree to pay off the group’s debts.
V12 Group Finance Ltd and its wholly owned subsidiaries, V12 Retail Finance Ltd and V12 Personal Finance Ltd provide retail point of sale loans, typically for 12 months on an unsecured basis to consumers who are predominantly classified as prime borrowers. The loans are originated through a national network of in-store and online retailers using a point of sale technology-based platform.
Following the deal, the business will continue to trade using the V12 brand. STB said the group’s activities were complementary to its own retail finance offering.
The group’s loan book had balances of approximately £35m at November 30. The vendors comprise private investors including leading venture capitalist Jon Moulton and V12’s own management team. The V12 management team will continue in the business.
The initial £3.5m will be paid by STB on completion, which is scheduled to be January 2, 2013. Upon acquisition STB will immediately provide funding so V12 can fully redeem around £7m of subordinated debt, principally held by Mr Moulton. In addition, STB will provide funds to enable V12 to repay its existing bank finance from RBS of approximately £28.5m.
STB said the deal would be funded from its existing resources and the additional regulatory capital requirements arising from the enlarged STB balance sheet would be provided from a proportion of the proceeds of the placing undertaken by STB in November. The net assets being acquired are expected to be valued at around £3.4m and the costs incurred by STB to complete the deal have been estimated at £0.7m.
STB said it would provide V12 with the funding needed to expand organically by strengthening relationships with existing retailers, forging deals with new retailers and expanding its range of products and services. The acquisition is expected to be earnings enhancing for STB in the 2013 financial year.
Paul Lynam, Chief Executive Officer of Secure Trust Bank, said: “Over the last three years STB has developed its own retail finance business with lending balances as at the end of September 2012 standing at over £60m. Despite this rapid growth, the market opportunity remains very significant.
“The acquisition of V12 gives us greater critical mass and ownership of a technology-based platform necessary to provide consumers with in store and online point of sale finance.
“Like many non-bank financial institutions, V12’s ambitions have been frustrated by the lack of wholesale funding in the recent past. STB’s funding will help to unlock V12’s potential.”
Mark Beardmore, managing partner for DLA Piper’s Birmingham office, and Emily Allen, corporate associate, were the lead external legal advisers to STB on the deal.
“We were delighted to work with STB on this transaction and look forward to working with them in the future,” said Mr Beardmore.
