Accord Financial Corp. (TSX: ACD) announced today that it has acquired a portfolio of factoring and asset-based loans from Brome Capital through its subsidiary, Accord Financial Inc. (AFI). After taking into account the acquisition, Accord’s portfolio of loans currently exceeds $120 million.
Fred Moss, President of AFI, stated: “The acquisition of this portfolio of loans reinforces our leadership position as a provider of factoring and asset-based lending to the Quebec market. The profile and quality of the acquired assets fits perfectly into our current portfolio.”
Range Advisors expects to see consolidation over the next few years in the high yield, secured debt market that focuses on small and medium sized businesses. Accord’s $120 million AUM is significant enough to make them a Canadian player if they can retain the assets.
The acquisition was relatively small. We estimate the purchased portfolio to be in the $10 million to $15 million range. There was no valuation disclosure, which means it was likely an all cash deal (perhaps with a variable purchase price for retention). Accord generally trades at approximately its book value.
Posted by Scott Sinclair, Range Advisors
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