Login
ISCOVER
Jessica Darnbrough
Firstfolio has announced that it is in exclusive negotiations to acquire non-bank mortgage manager and finance brokerage, Club Financial Services (CFS).
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
If the acquisition goes through, Firstfolio would take control of CFS’ $2.8 billion wholesale and aggregated loan book.
In addition, the aggregator would also lay claim to the company’s specialist mortgage management business – the National Finance Club – and the group’s risk insurance, investment and wealth management brokerage, with the sale to take effect from 1 October.
According to Firstfolio’s chief executive Mark Forsyth, CFS represents a good acquisition target as it is a profitable, well-run operation that currently writes in excess of $70 million in new finance commitments each month.
“On completion, this transaction will take the company’s loan portfolio beyond $20 billion, a significant milestone that includes $12 billion in loan book acquisitions since 2008. The CFS business has a growing national distribution network with operations headquartered in South Australia,” Mr Forsyth said.
“CFS would also provide ongoing access to an additional wholesale funding facility with Advantedge. This will enhance Firstfolio’s access to competitively priced wholesale funds, and complement our existing arrangements with ING and Adelaide Bank.”
The acquisition would represent Firstfolio’s sixth acquisition in 24 months.
Earlier this year, Mr Forsyth told The Adviser that the company’s first five acquisitions had proved very fruitful – contributing more than $15 million to profit expectations.
Under the terms of the latest acquisition, Firstfolio will provide an initial payment of $15.7 million with deferred payments of up to another $4.3 million, 12 months from 1 October 2010.
