CML to Acquire Invoice Finance Lender
CML Group has entered into a binding agreement to purchase Skippr Invoice Finance as part of its latest plans to expand its reach.
CML Group, the parent company of Cashflow Finance and Classic Funding Group, has reached an agreement with online invoice financing platform Skippr for an initial payment of $2.25 million (via a combination of cash and certificates) . If all earn-out hurdles are met (which would be set at “a substantial multiple of current funding volumes” over the next 2.5 years), this will yield a maximum transaction price of $6.5 million .
Founded in 2015 by former NAB corporate agribusiness banker Alistair Lamond and former HSBC Hong Kong fund manager Patrick Crivelli, Skippr began as a cash flow management tool and debt financing solution.
After changing ownership in 2019, Skippr is now an online invoice finance platform that integrates with a customer ledger by accessing accounting technology, such as Xero or MYOB, to provide “transparency on new invoices and efficient financing approval, simple and automated reconciliation of payments. and real-time monitoring of account transactions”.
Its new platform was launched in beta form in October 2019 and has onboarded 25 customers so far.
The current loan portfolio stands at $1.2 million.
According to CML, the acquisition will allow the group to access smaller customers (with accounts receivable below $200,000) profitably and “improve customer retention through a better and more automated user experience for existing and new customers.
Following the completion of the acquisition, CML will combine the Skippr online platform with its current Cashflow Finance and Classic Funding Group offerings to launch an expanded product.
Daniel Riley, CEO of CML, said, “The acquisition of Skippr advances our technology development by two years. We see this as extremely important as Australian SMEs begin to find alternative working capital such as invoice financing as they begin to emerge from COVID-19.
“We are pleased with the recent performance rebound in June, which continued into July, and our ability to offer more automation, which will allow us to serve smaller customers while providing our existing and future customers with better customer experience, be important to sustaining the growth we expect in this year and in the years to come.
The Skippr deal is the latest deal the SME finance group has entered into recently. Earlier this year, CML was ready to merge with debtor finance specialist Scottish Pacific; However, both groups terminated their plan of arrangement by mutual agreement in May.
Speaking to The Adviser at the time, Mr Riley said “circumstances had changed significantly” in the two months since the deal was signed, with “COVID-19 business conditions influencing the thinking of each”.
He added that this meant that scottish pacific had turned into “a reluctant bidder looking for angles, contractually, to cut the deal off”.
Grow Finance acquires AIF
In addition to the acquisition of CML/Skippr, the SME lender Grow Finance Group also announced the acquisition of an invoice finance lender.
Grow Finance Group – which offers finance products for SMEs including trade finance, invoice finance and asset finance – has acquired debtor funder AAustralian Invoice Finance Limited (AIF).
Non-bank lenders agreed to the transaction in early March 2020 and the deal is now complete.
AIF employees will now join the Grow team, but Australian Invoice Finance will continue to operate under its own brand for the time being. AIF Managing Director Greg Charlwood left the company by mutual consent.
With the merger with the AIF team, Grow Finance now increases its workforce to approximately 50 people.
“Grow is delighted to welcome the AIF team and add this important SME finance product to our existing and potential customer base,” said Greg Woszczalski, co-CEO of Grow Finance.
“Improving the customer experience by having a central point to provide funding for their business needs, reduces the number of applications required and helps get funds into our customers’ accounts faster,” he added. .
The acquisition marks the second such transaction undertaken by Grow Finance Group in the past year, following the acquisition of Eclipx business activity in September 2019.
Co-CEO David Verschoor noted that “providing more loan products [for] existing and potential customers” has been a key driver of the group’s expansion.
[Related: ScotPac and CML merger off the table]