SYDNEY, AUSTRALIA: COG Financial Services Limited (COG) announced the acquisition of a 70% interest in Club Transport Finance Pty Ltd (trading as Chevron Equipment Finance) via its subsidiary QPF Holdings Pty Limited (QPF). The transaction was completed on Friday 1 July 2022.
Chevron Equipment Finance specialises in arranging asset finance for commercial clients. Its client base consists of SMEs predominantly operating in the transport and earthmoving sectors Australia wide.
Chevron Equipment Finance is a growing business driven by a strong sales culture and disciplines. It is highly process-driven, with industry leading inbound and outbound lead generation programs, complemented by proprietary software programs that allow the business to be highly scalable.
These attributes will complement and add-value to both QPF and COG businesses.
Key terms of the acquisition are as follows:
• All cash consideration of $7.0m paid by QPF for a 70% ownership interest in Chevron
• Cash consideration funded by QPF through:
o $4.2m (60%) external borrowings; and
o $2.8m (40%) capital raising (at QPF subsidiary level)
• The 30% balance of Chevron shares will remain with the company’s founder who has entered into restraints and will continue to operate the business on a day to day basis for a minimum period of 3 years
• Options exist over the 30% balance of Chevron shares to allow a further restructure across 5 years that will see QPF increase its holding to 90% with the balance of 10% to be held by management. Over this period there will be an orderly transition of management duties and client and broker relationships
In relation to the QPF $2.8m capital raising, COG and other QPF minority shareholders have contributed capital pro rata to their existing shareholding and consequently the ownership interest of each QPF shareholder, post capital raise, remains unchanged. COG has funded its subscription for shares in QPF of $1.6m through a drawdown on its CBA debt facility.
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