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Brokerage Westlawn Finance Limited is set to acquire Melbourne-based mortgage lender and funds management business, Equity-One Mortgage Fund Limited.
SME lender, aggregator and equipment leasing group COG Financial Services Limited has announced that its subsidiary Westlawn Finance Limited (of which it owns 75 per cent) is set to acquire 100 per cent of the issued capital of peer-to-peer lender Equity-One Mortgage Fund Limited (Equity-One).
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Equity-One operates a contributory mortgage scheme and has approximately $350 million of funds under management.
Under the proposed transaction, Westlawn would look to acquire 70 per cent of the issued capital in Equity-One for a cash consideration of $24 million on 1 March 2022 (subject to satisfaction of certain conditions).
The remaining issue capital would then be bought over three additional tranches (subject to option exercise) over the years following.
Commenting on the facility COG chief executive Andrew Bennett said: “This is a highly EPS [earnings per share] accretive transaction using a portion of the surplus cash on Westlawn’s balance sheet.
“In addition, Westlawn will provide growth pathways for Equity-One Mortgage Fund Limited through the utilisation of its existing branch distribution network.”
Equity-One managing director Dean Koutsoumidis told The Adviser: “We are very pleased to announce that Westlawn (which is 75 per cent owned by COG) will be a major shareholder of Equity-One.
“The synergies between the respective financing, funds management, insurance and finance broking businesses are clear and pave the way for exciting growth for Equity-One and the services it provides to its clients.”
Mr Koutsoumidis concluded: “When we initially met the key people at COG and Westlawn, it was immediately apparent that our ideology and values were aligned.
“We look forward to working with our new team and building the respective businesses.”
The news comes as COG continues to grow its presence and size, and this week revealed that it had established a $31 million acquisition finance facility with a “major Australian bank” to help the group continue its “acquisition led growth strategy”.
According to its financial year 2021 results, brokers operating under its finance broking and aggregation companies (including Consolidated Finance Group, Platform Finance Group, Centrepoint Finance, QPF Finance Group and Linx Australia Group) settled $5.2 billion in FY21, an increase of 14 per cent on the prior year, driven by strong demand and as a result of the group’s continuing acquisitions.
It is estimated that the group now has just over 3,000 brokers in its network, making up 18 per cent market share of broker-originated asset finance.
However, the group is said to be targeting 30 per cent market share, representing net asset finance of approximately $6.5 billion – both through organic growth, as well as acquiring strategic stakes in complementary businesses.
[Related: COG makes acquisition moves]
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