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Accord Financial Corp. (TSX:ACD) has announced the successful sale of portfolio assets from Accord Equipment Finance (AEF), its U.S. equipment leasing division. The buyer is a prominent privately held factoring and finance company in the United States. As part of this acquisition, AEF’s professional team will also transition to the acquirer, ensuring a seamless handover for the company’s valued clients.
The proceeds from this transaction stands at $63.2 million. The net proceeds will primarily be allocated to reducing the Company’s primary banking facility. Additionally, Accord has the potential to earn an extra US$400,000 based on the credit performance of the portfolio through 31 December 2025. The transaction, which closed on September 30, is currently undergoing final accounting assessments, including the elimination of $3.0 million in AEF-related intangible assets reported as of June 30, 2024. Details of the transaction will be included in Accord’s upcoming Third Quarter Report.
This sale aligns with Accord’s ongoing review of strategic initiatives aimed at refocusing on its core business and enhancing shareholder value. Simon Hitzig, Accord’s President and CEO, commented, “This transaction clearly demonstrates the value of Accord’s assets in the private market, both the value of the portfolio as well as the operating platform.”
The divestment is a strategic move for Accord as it aims to concentrate on its core business operations. Since its inception in 1978, Accord has established a solid presence in the North American market, specializing in receivables finance, asset-based lending, and factoring. The company is also committed to growing its footprint in the Canadian small business finance sector, which has experienced significant growth over the past five years. This transaction aligns Accord's capital with its focus areas, positioning the company to compete and expand further.
The Hovde Group, a U.S.-based investment banking firm known for its expertise in the financial services sector, acted as the exclusive advisor for Accord throughout this transaction.
