Selling a leasing company
Leasing companies are back in vogue, and not a month goes by without another press release stating that a leasing company has been bought by another leasing company. I remember the days back in 2008 when we were not in fashion. There was no merger and acquisition activity in the market and banks were pulling funding lines left, right and centre. Now there seems to be a glut of cash and a lot of activity in the leasing acquisition sector.
Leasing Company Valuation
One thing is noticeable, the crazy valuations leasing companies are putting on themselves. Brokers, often without their own lease portfolio, seem to think their companies are worth a fortune. Alas, this is not always the case.
What is clear is that finance companies in general have a clear desire to grow their lease portfolios. They are chasing growth, and sometimes the simplest way to achieve this is to buy a broker who introduces the deals. There is logic to this, one acquisition and you can increase volume significantly overnight. The extra profit on the lease interest, documentation fees and potential end of term income makes the cost of acquisition easier to swallow. Back in the days when we sold Wyse Leasing, different valuations models were used.
Who will buy my Leasing Company?
So who is out there looking to buy leasing brokers? Well, we are at WestWon. One of our key corporate objectives is to grow via acquisition. Shown by our recent acquisitions of Broughfame Limited and Corporate Computer Lease PLC (CCL) and Smart Fund IT . For us it makes real sense, say our new business team onboard 100 new clients every month for example. We can do one acquisition and increase our customer portfolio by 1,200, a years’ worth of new business.
Investment into my Leasing Company
One of the key differences with us is that we are very flexible as to how we acquire a leasing company. We have been offered a 25% shareholding in another leasing broker where one of the founding partners wanted to leave. When we set up WestWon Leasemaster, the original shareholder of that company, Steve Holdstock, wanted to keep a 50% share in the business. In other instances, we have just bought the client portfolio. Regularly, we have injected cash into another leasing company by just acquiring the lease portfolio of one finance company from a broker. With our most recent acquisition of the customer base of Corporate Computer Leasing, we bought a list that is up to 15 years old. Some may say a waste of money, however, to us, this information is worth a lot of money.
If you are selling your leasing company, want to raise some money against your client portfolio or looking to merge, please give me a call at WestWon for a confidential conversation.
Please call me, Jeremy Hall, CEO of WestWon on 01494 611 456