Cash offer for Aldermore06/11/2017
The Board of Aldermore has recommended a cash offer for the entire business of 313p per share, equivalent to a £1.08 billion purchase price. The offer comes from South Africa’s largest financial institution by market capitalisation, FirstRand Ltd, via FirstRand International Limited, which already owns Cardiff-based MotoNovo. The sale is subject to several conditions, including Aldermore shareholders’ approval at their General Meeting (FirstRand already has irrevocable undertakings from 26.3pct of Aldermore’s shareholders), approval from the PRA and FCA, and the South African Registrar of Banks.
So what does this mean for Aldermore? Firstly, it means that it will have the financial strength of a £15.8 billion financial institution behind it. Aldermore’s long time start-up investor, a fund managed by Anacap, has finally achieved a full and successful financial exit. Aldermore’s executive team is also in a position to cash in their shares, in fact Phillip Monks, the bank’s CEO must sell his shareholding worth £10.6 million to FirstRand as part of the deal. He will head up a new and enlarged Aldermore, which will be significantly beefed up by the transfer and integration into Aldermore of FirstRand’s other UK business, MotoNovo, itself a £3 billion book of used car finance, personal loans and insurance. This combined platform will be further stimulated by FirstRand’s input into broadening the business model, cross-selling opportunities, and new financial services offerings.
Aldermore will be creating two distinct customer facing businesses – Business Finance and Retail Finance. Carl D’Ammassa, Group Managing Director for Business Finance will now lead the bank’s commercial mortgage and property development division in addition to his existing remit covering both the asset and invoice finance businesses.
Since joining in 2013, D’Ammassa has managed significant growth in the bank’s Business Finance division making it the largest player in the broker-introduced asset finance market. Most recently, he has overseen the acquisition of a minority equity stake in AFS Group Holdings Limited, one of the largest introducers to asset and commercial finance funders in the UK.
What would have prompted a large South African institution like FirstRand to buy British? How might things change at Aldermore from the perspective of asset finance brokers? What does this mean for the UK’s asset finance industry? The upcoming edition of Leasing World examines these questions in greater detail and comes up with interesting conclusions.