It was announced today that First Citizen Finance has concluded negotiations for the sale of 66.7% of the Company to Magnetar Capital for a total of €28.2m.
In conjunction with the investment, Magnetar will also make available a senior secured working capital facility for an additional €42m in further support of the business and new lending up until 2020.
The new capital raise will enable First Citizen to develop additional products and expand its overall financial footprint in the Irish market. It will also drive the development of Agri/SME Equipment finance operations to new levels and underpin the company’s entry into the Commercial Real Estate finance market.
Since commencement of the origination of finance in the auto industry in 2014, the Company has processed more than 61,000 loan applications; with a value of close to €1bn.
The Company is privately owned and acquired the entire PTSB Finance operational platform in 2012. Prior to this acquisition, PTSB Finance had been one of the largest consumer finance companies in Ireland, with a market share of over 35%.
At its peak in 2008, the platform was processing approximately 100,000 applications per annum for credit in Ireland over a range of products including car finance, agricultural machinery, office equipment, computers, and film finance investment.
The Company has retained and enhanced the capabilities of the acquired operational platform. This allows it to originate and service a wide range of loan portfolios including Asset Finance, comprising Consumer and Non-Consumer Hire Purchase, Leasing, Contract Hire on a variety of different asset classes including Agricultural equipment finance where the Company is an On-lender for the SBCI (Strategic Banking Corporation of Ireland) which provided a €40,000,000 lending facility.
For all of these products, the Company’s platform has full cradle-to-grave functionality. This includes distribution, origination, underwriting, customer servicing, and collections / special servicing. First Citizen developed and owns the intellectual property rights of all of the key systems used in the business, which were developed over a 20-year period and reflects a substantial accumulated financial investment.
Commenting on the deal, Founder and Chief Executive of First Citizen, Chris Hanlon said, "We are delighted to have concluded this agreement with Magnetar with whom we have worked closely since the launch of our auto finance origination platform in January 2014. Magnetar’s financial strength and expertise, combined with the sectoral knowledge and experience that my team brings to the partnership, bodes well for our future."
Source: www.businessworld.ie
