Time Finance has agreed to a £55.1m cash takeover by Bentley Park, the parent of specialist lender Ultimate Finance, in a deal that would create one of the UK’s larger independent lenders to small businesses.
Under the recommended offer, Time Finance, which offers asset finance, invoice finance, business loans and asset-based lending, will see shareholders receive 59.1p in cash per share, valuing the AIM-listed lender at about £55.1m.
The price is a 12.6% premium to Time Finance’s closing price on 14 August, and a 27.5% premium to its average over the previous six months.
But the offer price is only just above the 52-week high, so shareholders may wonder why the board didn’t put up more of a fight.
Bentley Park said combining Ultimate Finance with Time Finance would create a scaled, multi-product lender with a net loan book of nearly £650m, better placed to serve UK small and medium-sized businesses across their working capital and asset finance needs.
The deal’s multiples present very good value for the acquirer.
Time Finance has grown its loan book for 20 consecutive quarters and reported £37.1m of revenue and £7.9m of pre-tax profit in its last full year, with a net loan book of around £218m by the end of June.
Time Finance’s board, advised by Cavendish, unanimously recommended the offer, calling the terms fair and reasonable and saying it provided shareholders with an attractive premium and full liquidity, along with the flexibility to pursue growth outside the constraints of public markets.
Bentley Park has already secured support from shareholders, including the Time Finance directors, representing about 47% of the company.
Yet another AIM company is set to leave.