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ISCOVER
By: Jessica Darnbrough
Furthering its bid to become one of Australia’s leading mortgage and financial services groups, Firstfolio yesterday acquired selected key assets of LeaseChoice.
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The $2.4 million acquisition of LeaseChoice – a specialist in business equipment finance and leasing solutions – represents Firstfolio’s fourth acquisition in as many months.
Under the acquisition agreement, Firstfolio will receive the LeaseChoice business name, web-site, origination systems and associated trademarks.
The company will also have access to wholesale funding arrangements previously held by LeaseChoice.
According to an ASX announcement, the acquisition is expected to be earnings accretive in the first 12 months, contributing up to $750,000 to Firstfolio’s group EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) in that period.
Firstfolio’s executive director Mark Flak told The Adviser that the deal will enable the company to rapidly deploy a new suite of financial products each with strong reach into SME and corporate markets through its existing distribution network.
“Diversification of product and client portfolio has been a major goal for Firstfolio, and we have always been opportunistic in adding new financial service components that could benefit our existing distribution platform,” Mr Flak said.
“The acquisition of LeaseChoice will help us move away from just residential mortgages and become a diversified business that is a one-stop shop for customers.”
Mr Flak said the company’s decision to acquire the equipment finance and leasing specialist had already received favourable feedback from its broker channel.
“We have already had people ask: ‘when can I become accredited with LeaseChoice’, so it seems they are happy with our decision. While we are actively trying to grow our loan book through acquisitions, I can safely say that we will not acquire companies just for the sake of it. The company in question has to fit in with our strategic direction and LeaseChoice does just that.”
Since December last year, Firstfolio has acquired three other companies including First Chartered Capital, Loan Services Australia and Xplore Capital.
