Financial services provider Credit Intelligence (ASX: CI1) has announced the completion of its 60% acquisition of Sydney-based debt restructuring firm, Chapter Two Holdings, and has its eye on more Australian businesses.
Today’s news follows a share purchase agreement announced in early June with the Hong Kong and Singapore-based lender aiming to use the acquisition to crack into the Australian debt market.
In a separate announcement today, Credit Intelligence also revealed it has appointed Novus Capital as its corporate and financial advisor.
The NASDAQ-listed advisory firm will be assigned to identify and assist in the acquisition of debt management businesses in Australia that have “synergies with the company’s Asia Pacific expansion strategies”.
Chapter Two deal
Sydney-headquartered Chapter Two provides informal debt negotiation and mortgage broking services to individuals experiencing financial hardship in Australia.
Its alternative debt solutions are considered especially relevant during uncertain economic periods, when there is increased demand for options to avoid bankruptcy, a status that carries harsh consequences for individuals.
Credit Intelligence’s acquisition of Chapter Two is now sealed with the company making a cash payment of $400,000 on Wednesday.
Under the terms of the transaction, an additional $320,000 in Credit Intelligence shares will be issued over three years based on Chapter Two achieving an annual profit guarantee of $300,000.
The shares will be issued at a price determined by the 30-day volume weighted average price calculated on the completion date.
Credit Intelligence chairman Jimmie Wong said he is excited to support Chapter Two’s expansion across Australia by leveraging his company’s “significant experience and resources”.
“Chapter Two is a small company with a big potential for growth in the coming months as Australians experience financial trouble,” he told Small Caps.
“We are excited to be partnering with and investing in Chapter Two to unlock its significant growth potential, and continuing our Asia Pacific expansion strategy.”
Credit Intelligence is aiming to take advantage of Australia’s coronavirus driven recessionary phase and is actively seeking acquisitions or joint ventures to expand in the market.
This strategy has led to the company’s appointment of Novus as a corporate and financial advisor.
The team will be led by Novus Corporate Advisory Services director Robert Shaw, who has significant experience in growing companies in various industries and has strong knowledge of the sectors that appeal to Credit Intelligence.
“We look forward to working with Novus in growing our business in Australia as we ramp up our efforts to implement our acquisition strategies in the Asia Pacific region,” Mr Wong said.