Laurentian Bank of Canada has reached a definitive agreement under which a subsidiary of the Bank has agreed to acquire Northpoint Commercial Finance.
Northpoint is a leading North American inventory finance lender with a portfolio of approximately $1.2 billion as at March 31. The transaction is expected to close before the end of fiscal 2017, subject to customary closing conditions, including applicable regulatory notifications and approvals.
Laurentian Bank believes Northpoint Commercial Finance, which was founded in 2012, is one of only a few diversified inventory finance companies that provides the scale needed to serve North American manufacturers and their dealer networks.
“We are delighted to announce this acquisition that will increase the proportion of revenue generated by commercial activities within the bank mix, which is expected to improve its overall profitability,” says Francois Desjardins, President and Chief Executive Officer of Laurentian Bank of Canada. “We continue to make excellent progress on our transformation plan initiatives, including, among others, the optimization of our retail banking activities and the development of our core banking system, the backbone of our digital offer.”
“This acquisition is an excellent strategic fit with our equipment finance subsidiary, LBC Capital, resulting in an attractive end-to-end equipment finance platform,” explains Stéphane Therrien, Executive Vice President, Personal and Commercial Banking at Laurentian Bank. “It will broaden our Canadian offering and create a US presence, an important customer attribute for manufacturers and dealers looking for a single North American point of service. Northpoint team members led by Chief Executive Officer, Dan Radley, have years of experience in inventory financing, unique expertise and strong client relationships with leading companies. We are very happy to welcome them as they join the team under the leadership of Éric Provost, Senior Vice President, Commercial Banking at Laurentian Bank and President of LBC Capital.”
Laurentian believes the acquisition will be accretive to its earnings per share in the first full year of operation and by approximately 4.0 percent in 2019. The bank plans to finance the acquisition through a $225 million subscription receipts equity financing as well as existing balance sheet liquidity.
Laurentian Bank of Canada, founded in 1846, serves one and a half million clients across the country and employs more than 3,600 people. The bank caters to the needs of retail clients via its branch network based in Quebec. Laurentian reports having more than $43 billion in balance sheet assets and more than $32 billion in assets under administration.
Northpoint Commercial Finance, headquartered in Alpharetta, Georgia, has approximately 90 employees. The company offers an array of program structures to meet the needs of original equipment manufacturers, distributors, resellers, and dealers in a variety of commercial product industries. Those industries include marine, recreational vehicles, trailers, power sports, manufactured housing, outdoor power equipment, agriculture, construction, consumer electronics/appliances, office equipment and music.