Acquisition of George Banco, £225m term loan & RCF

RNS Number : 9662M

Non-Standard Finance PLC

03 August 2017

 

Non-Standard Finance plc

('NSF' or the 'Group')

3 August 2017

Acquisition of George Banco

£225m new term loan facility

£35m new revolving credit facility

Highlights

·	NSF has agreed to acquire George Banco for £53.5m in cash
·	NSF is now the clear number two in the UK's fast growing guaranteed loans segment
·	Together with TrustTwo, the Group had a combined guaranteed loan book of c.£40m as at 30 June 2017, representing approximately 20% of the enlarged Group total
·	The acquisition is expected to be earnings enhancing in the first full year post-acquisition (2018)
·	In the 12 months to 31 May 2017, George Banco generated revenue of £9.3m and EBITDA of £4.1m
·	Acquisition and refinancing is via a new £225m six-year loan facility provided by institutional investors
·	Additional funding available via a new £35m revolving credit facility provided by RBS

NSF is pleased to announce that it has agreed to acquire George Banco Limited ('George Banco') from its existing shareholders for an enterprise value of £53.5m, payable in cash.  Completion is expected in September 2017 and the acquisition is expected to be earnings enhancing in the first full year following completion.

Having launched in April 2014, George Banco has grown rapidly to become the number two player in the UK's growing guaranteed loans market, with a total net loan book of approximately £30m.  As part of a larger Group, we believe there is scope to continue to develop the business further and to grow profits substantially.

To finance the acquisition and refinance all of the Group's existing debt facilities, as well as to provide additional funding to support future growth, NSF has secured a new £175m term loan facility (the 'Term Loan'), provided by a group of institutional investors, led by Alcentra Limited.  The new six-year loan bears an interest rate of LIBOR plus 725 basis points per year with interest payable every six months. The same investors have also agreed to provide an additional committed facility of up to £50m under the same terms as the Term Loan.  In addition, the Group has also secured a new £35m revolving credit facility ('RCF') provided by Royal Bank of Scotland.

Commenting on the acquisition and refinancing, John van Kuffeler, Group Chief Executive said:

"George Banco represents a transformative acquisition for the Group, putting NSF into the clear number two position in the fast-growth guaranteed loans segment. Complementing our existing TrustTwo brand, George Banco provides us with real scale and an opportunity to grow even faster.

"With leading positions in each of our chosen segments, we now have a stable, long-term funding platform from which we can finance our growth plans.  We will continue to seek strategic opportunities in the UK's non-standard finance sector that meet our stringent criteria for growth and return on assets." 

- Ends -

For more information:

Non-Standard Finance plc John van Kuffeler, Group Chief Executive Nick Teunon, Chief Financial Officer and  Company Secretary Peter Reynolds, Director, IR and Communications	[phone]
Bell Pottinger Jonathan Hodgkinson Aarti Iyer Molly Stewart	[phone]

Interviews with John van Kuffeler, Chairman and Nick Teunon, Chief Financial Officer

Interviews with John van Kuffeler and Nick Teunon will be available as video and text from 7.00 am on 3 August 2017 on the Group's website: www.nonstandardfinance.com.

Analyst meeting, webcast, dial-in and conference call details

There will be an analyst meeting at 9.00 am on 3 August 2017 for invited UK-based analysts at the offices of JP Morgan, 60 Victoria Embankment, London, EC4Y 0JP (the entrance is in John Carpenter Street). The meeting will be simultaneously broadcast via webcast and conference call. To watch the live webcast, please register for access by visiting the Group's website www.nonstandardfinance.com. Details for the dial-in facility are given below. A copy of the webcast and slide presentation given at the meeting will be available on the Group's website later today.

Dial-in details to listen to the analyst presentation at 9.00 am, 3 August 2017

08.50 am	Please call [phone]
Access code	8462263
9.00 am	Meeting starts

All times are British Summer Time (BST).

 

END

 

 

ACQDGGDISXGBGRD