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One of Australia’s largest debtor finance providers has entered into a new partnership, heralding a new era for the lender.
At the end of last week, Scottish Pacific revealed that approximately 85 per cent of the business has been acquired for close to $100 million.
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Scottish Pacific handles approximately $3.5 billion of invoices annually, providing more than $250 million of funding to approximately 800 clients.
The group was acquired by Next Capital from Lazard Australia Private Equity, concluding a period of profitable expansion since it was acquired by Lazard, including the launch of a number of new products and significant growth in both client numbers and revenue.
Australia’s debtor finance industry has an annual turnover exceeding $62 billion, having experienced a strong growth trajectory in recent years with compound annual growth of more than 20 per cent since 1996.
Scottish Pacific chief executive officer Peter Langham said the lender was “excited to be entering a fresh chapter in its corporate life”.
“This is particularly significant given the reduced options available to SMEs since the GFC as the availability of traditional commercial banking lines has been reduced, leaving businesses few options to fund either current operations or to support growth in their working capital,” Mr Langham said.
“We also see an increased role for debtor finance as a source of financing for imports, particularly as the Australian economy continues the structural shift away from a traditional manufacturing base. Scottish Pacific is well placed to capitalise on this trend with an established beachhead in the Asian market.”
Next Capital co-founder Patrick Elliott added that he sees tremendous potential for the growth of Scottish Pacific underpinned by the emergence of debtor finance as a viable alternative to traditional banking facilities.
“We were attracted by the fundamentals of Scottish Pacific’s business, its reputation amongst its customers and the solid macro fundamentals driving the market, particularly in an environment of tightening credit conditions,” he said.
