Business lender acquires invoice financier

Grow Finance Group, which offers SME finance products including trade finance, invoice finance, insurance finance and asset finance, has acquired Australian Invoice Finance Ltd (AIF).

According to the group, the parties commercially agreed to the transaction in early March (before the lockdown measures were first introduced to limit the spread of coronavirus in Australia), with the deal having now completed the transaction “despite the challenging landscape of COVID-19”.

The move has seen AIF staff move to Grow Finance, expanding its employee numbers to 50. AIF's managing director, Greg Charlwood, has left the business by mutual consent.

The acquisition marks the second such deal undertaken by Grow Finance Group in the past year, after it acquired the Eclipx Commercial business in September 2019. 

The co-CEO of Grow Finance, David Verschoor, noted that AIF was a successful invoice finance business with experienced and dedicated staff around the country, and that the acquisition would help the fintech platform expand its SME finance facilities.

“Providing more lending products to our existing and prospective clients is the driver from Grow’s standpoint,” he said.

While AIF’s employees will join the Grow team, Australian Invoice Finance will continue to operate under its own brand for the time being.

“Grow is delighted to welcome the AIF team and to add this important SME finance product to our existing and prospective client base,” co-CEO Greg Woszczalski said.

“Improving the client experience by having a central point to provide funding for their business needs reduces the number of applications required and allows speed of getting the funds in our clients’ accounts,” he added.

CML Group acquires Skippr

In related news, CML Group – the parent company of Cashflow Finance and Classic Funding Group – has also announced that it has entered into a binding agreement to purchase an invoice finance lender, Skippr Invoice Finance.

Skippr is an online invoice finance platform that integrates with a client receivables book by accessing accounting technology such as Xero or MYOB to provide an “end-to-end invoice finance solution”.

Its new platform launched in beta in October 2019 and has onboarded 25 clients to date.

The current loan book sits at $1.2 million.

The agreement will see ASX-listed CML Group acquire 100 per cent of the shares of online invoice finance platform Skippr for an initial payment of $2.25 million (via a mix of cash and scrip), with earn-out structure over the next 2.5 years gaining a maximum price of $6.5 million, if all earn-out hurdles are achieved.

The transaction is expected to be completed in mid-August 2020, at which time CML will combine the online Skippr platform with its current Cashflow Finance and Classic Funding Group offerings to launch an expanded product.

CML outlined that the acquisition would help it target smaller clients more profitably (outlining that Skippr’s cost of acquisition was approximately $2,000, compared with CML’s historic cost of approximately $20,000).

“By improving the online accessibility of CML’s invoice finance solutions, CML will increase our exposure to a broader range of SME clients, significantly increasing the current addressable market,” CML told investors.

Daniel Riley, CEO of CML, commented: “The acquisition of Skippr brings forward our technology development by two years. We see this as extremely important as Australian SMEs begin to source alternative working capital facilities such as invoice financing as they start to come out of COVID-19.

“We have been pleased with the recent rebound in performance in June, which has continued in July, and our ability to offer more automation, which will enable us to service smaller clients while providing our existing and future clients with a better customer experience, will be important to maintain the growth we expect over this and future years.”

Earlier this year, CML had been set to merge with debtor finance specialist Scottish Pacific; however, the two groups terminated their scheme of arrangement by mutual agreement in May.

[Related: Debtor finance the ‘tool of choice’ for struggling SMEs]