CML to acquire invoice financing lender
The 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 upfront payment of $ 2.25 million (via a mix of cash and scripts) . If all earn-out hurdles are met (which should be set at “a substantial multiple of current funding volumes” over the next 2.5 years), this will earn a maximum transaction price of $ 6.5 million. dollars.
Founded for the first time in 2015 By former NAB corporate agro-banking 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 financing platform that integrates with an accounts receivable ledger by accessing accounting technology, such as Xero or MYOB, to provide “transparency on new invoices and efficient approval for financing, easy and automated reconciliation of payments. and real-time monitoring of account transactions ”.
Its new platform launched in beta in October 2019 and has so far onboarded 25 clients.
The current loan portfolio stands at $ 1.2 million.
According to CML, the acquisition will allow the group to profitably access smaller customers (with accounts receivable below $ 200,000) 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 online platform Skippr with its current offerings from Cashflow Finance and Classic Funding Group to launch an expanded product.
Daniel Riley, CEO of CML, said: “The acquisition of Skippr advances our two-year technological development. We see this as extremely important as Australian SMEs start raising alternative working capital such as bill financing as they start 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. will be important to maintain the growth we expect in this year and years to come.
The Skippr deal is the latest deal recently concluded by the SME finance group. Earlier this year, CML was configured to merge with debtor finance specialist Scottish Pacific; However, both groups ended their plan of arrangement by mutual agreement in May.
Speaking to the adviser at the time, Mr Riley said “circumstances have changed dramatically” in the two months since the deal was signed, with “COVID-19 trade terms influencing thinking from everyone”.
He added that this meant that Scottish Pacific had turned into “a reluctant bidder in search of angles, contractually, to interrupt the transaction”.
Grow Finance acquires AIF
As well as the acquisition of CML / Skippr, the SME lender Grow Finance Group also announced the acquisition of an invoice finance lender.
Grow Finance Group – which provides finance products to SMEs including trade finance, invoice finance and asset finance – has acquired debtor financing provider AUstralian Invoice Finance Limited (AIF).
Non-bank lenders accepted the transaction in early March 2020 and the deal is now done.
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 CEO Greg Charlwood has left the company by mutual consent.
With the merger with the AIF team, Grow Finance now brings its workforce to around 50 people.
“Grow is delighted to welcome the AIF team and add this important SME finance product to our existing and potential client base,” said Grow Finance co-CEO Greg Woszczalski.
“Improving the customer experience by having a central point to finance the needs of their business, reduces the number of requests required and makes it possible to accelerate the obtaining of funds on the accounts of our customers”, he said. he adds.
The acquisition marks the second such transaction that Grow Finance Group has undertaken in the past year, following the acquisition of Eclipx Commercial business in September 2019.
Co-CEO David Verschoor noted that “providing more loan products [for] existing and potential customers ”has been one of the main drivers of the group’s expansion.
[Related: ScotPac and CML merger off the table]
Annie Kane is the editor-in-chief of The Adviser and Mortgage Business.
In addition to writing about the Australian brokerage industry, mortgage market, financial regulation, fintechs and the broader lending landscape – Annie is also the host of Elite Broker and In Focus podcasts and The Adviser Live webcasts. .