COG Financial’s (ASX:COG) subsidiary acquires 70% interest in Chevron

Image Source: © Airdone | Megapixl.com

Highlights:

  • QPF Holdings, subsidiary of COG Financial has bought 70% stake in Chevron Equipment Finance.
  • QPF paid all-cash consideration of AU$7.0 million to Chevron.
  • The remaining 30% in Chevron shares will be retained by the company’s founder.
  • The transaction was completed on 1 July 2022.

ASX-listed diversified financial company, COG Financial Services Limited (ASX:COG), on Monday (4 July 2022), shared that its subsidiary QPF Holdings Pty Limited (QPF) has acquired 70% stake in Club Transport Finance Pty Ltd. Club transport is trading as Chevron Equipment Finance.

At 10:03 AM AEST, COG started trading at AU$1.600 apiece, up 0.628%.

COG Financial claims to be Australia’s leading finance broker aggregator. The company is also focused on the equipment leasing business for SMEs (small to medium-sized enterprises). As a finance broker aggregator, COG provides aggregation services to brokers in which it has invested and independent brokers. Consolidated Finance Group, Platform Finance, Westlawn, QPF Finance Group, Centrepoint Finance and Linx Australia Group are the subsidiaries of COG, as per the company’s official website.

Key highlights from the transaction:

For buying 70% in Chevron, QPF has paid all-cash consideration of AU$7.0 million. QPF funded 60% of the transaction by external borrowings and the rest 40% by capital raising at the QPF subsidiary level.

COG informed the market that 30% interest in Chevron would remain with its founder.

According to the ASX release, the transaction has the option to restructure 30% interest in Chevron across five years, under which QPF can buy an additional 20% ownership in the company. The management would hold the remaining 10% interest.

The rationale behind the acquisition:

Image source: © Denisismagilov | Megapixl.com

Chevron offers more personalised services to assist SMEs in business growth. The company's client base is dominated by SMEs majorly operating in the earthmoving and transport sectors across Australia. Reportedly, Chevron is a highly process-driven company with industry leading outbound and inbound lead generation programs. The business is complemented by proprietary software programs that empower businesses to become highly scalable.

These attributes of Chevron are expected to add value and complement COG and QPF business.

Share performance of COG

In six months, the share price increased by 6%, and in a year, the shares jumped by over 17%. In one month, the shares fell by 5.36%. With a market cap of AU$298.77 million, this company has recorded a 52-week low of AU$1.190 and a 52-week high of AU$1.840.


 


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