Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za

Finbond’s expansion strategy sees acquisition of AFC

Finbond CEO, Dr Willie van Aardt

Finbond has entered into an agreement to acquire 100% of US based short-term lender America’s Financial Choice Inc. for US$7 million (R99.6 million). The closing date of the transaction is expected to be 1 December 2017.

According to Finbond’s CEO Dr Willem van Aardt, America’s Financial Choice has an extensive successful track record as an alternative lender specialising in instalment and auto title lending. It operates through 20 brick and mortar locations in the state of Illinois and has been in existence since 2003. He says the acquisition is in line with Finbond’s strategy to transform itself into a multinational financial services business.

“Our aim is to diversify across geographies, market segments and products and generate the majority of our revenue in US dollars,” says van Aardt.

Finbond currently has a presence in 16 US states, namely California, Illinois, Wisconsin, Missouri, South Carolina, Tennessee, New Mexico, Utah, Nevada, Louisiana, Mississippi, Alabama, Oklahoma, Michigan, Florida and Indiana. It also has a presence in Ontario, Canada.

“Growing our US dollar revenue base provides geographical diversification, greater economies of scale and an effective hedge against rand volatility and political risk,” says van Aardt. “Most of all, it increases our core short-term lending competency.”

He says Finbond’s rapid North American expansion has been enabled by teaming up with owner-managers with 10 – 30 years’ experience in operating short-term unsecured lending businesses in the region.

America’s Financial Choice specialises in the design and delivery of value and solution based short-term unsecured consumer instalment loans and auto title loans tailored around borrower requirements. The company’s wide range of consumer finance products gives it the ability to offer credit to a broad spectrum market.

Its key strengths include experienced management and sound business structure, a strong market position in Illinois and a healthy focus on regulatory compliance, with the proven ability to effectively steer through regulatory changes. It has a healthy repeat customer base, focused cash generative short-term instalment loan and title loan products, and efficient collection capabilities.

The value of the normalised assets of America’s Financial Choice at 31 December 2016 was US$3.8 million (R53.2 million). Its net profits after tax attributable to its assets for the year ended 31 December 2016 were US$1.7 million (R23.8 million), translating to earnings before interest, taxation, depreciation and amortization (EBITDA) of US$2.1 million (R29.4 million).

The conclusion of the acquisition of America’s Financial Choice is subject to the final approval of the Finbond group’s Board, Executive Committee, Investment Committee and Risk Committee.



Latest


01 Aug 2020
Achieving balance is not as easy as 60/40

By: Tumi Loate: Investment Team Member, 36ONE Asset Management A simple and traditional balanced portfolio, which allocates 60% to equities…

Achieving balance is not as easy as 60/40

By: Tumi Loate: Investment Team Member, 36ONE Asset Management A simple and traditional balanced portfolio, which allocates 60% to equities and 40% to bonds (a 60/40 allocation) irrespective of the cycle, has produced more than satisfactory returns for global investors over the last two decades. Importantly, however, these returns have…

01 Aug 2020
2020 – a rollercoaster ride

By: James Klempster, CFA, Director of Investment Management, Momentum Investments How to sum up 2020 so far?  A rollercoaster is…

2020 – a rollercoaster ride

By: James Klempster, CFA, Director of Investment Management, Momentum Investments How to sum up 2020 so far?  A rollercoaster is probably the best way to describe it; both from an emotional perspective but also in terms of what the markets have been up to. Over the first quarter, market participants went…

30 Jul 2020
Income protection could be the best investment you ever make

According to the recent Stanlib Savings Report 2020, Covid-19 has highlighted how unprepared South Africans are for unforeseen financial shocks…

Income protection could be the best investment you ever make

According to the recent Stanlib Savings Report 2020, Covid-19 has highlighted how unprepared South Africans are for unforeseen financial shocks – and left without a steady income flow, many have had to dip into long-term savings to fund day-to-day expenses. Part of the reason is that South Africans tend to…

29 Jul 2020
Building a business legacy takes planning

By: Gerhardt Meyer CFP®, Head of Technical Support, PSG Wealth Running a successful business takes a sizeable financial investment. However,…

Building a business legacy takes planning

By: Gerhardt Meyer CFP®, Head of Technical Support, PSG Wealth Running a successful business takes a sizeable financial investment. However, many business owners fail to plan for what happens should they die, become disabled or lose one of their key employees because of these very reasons. If you are a…


Top stories


10 Apr 2020
When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved…

When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved to be most enterprising in acclimatising to challenges as they arise.

13 Apr 2020
Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19…

Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19 environment and what form a global market recovery will take.

13 Apr 2020
SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The…

SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The draft Bill, together with its explanatory memorandum, provides clarity with regards the tax relief measures President Cyril Ramaphosa announced on 23 March.

11 Apr 2020
Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the…

Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the global economy is facing an unprecedented situation of balancing health against financial livelihoods.