Bank of Queensland (BOQ), an Australian financial institution and CIT Group, a provider of financing to small businesses and middle market companies in the US, have signed a purchase agreement under which BOQ will acquire Sydney-based CIT Group Australia and CIT Group New Zealand (CIT ANZ).
BOQ has said that it would acquire the CIT ANZ vendor equipment finance business which operates in the IT and office market as well as the motorcycle and power equipment market.
BOQ currently has a equipment finance book of approximately $3.2bn and the acquisition of CIT ANZ represents around 15% of this book. At December 31, 2009, CIT Group (Australia) had $485m in assets and approximately 125 employees.
David Liddy, managing director of BOQ, said: “This purchase provides BOQ with access to a strategic specialised market and an ideal growth platform from which to grow new vendor relationships. We see significant growth in the vendor finance market and this acquisition provides an ideal growth platform for BOQ. The CIT ANZ business has a reputable track record in the domestic market and will complement BOQ’s current core competencies in the equipment finance market.
“The business fits in with our focus on gaining greater market share in the SME segment and augments our existing equipment finance capabilities. We currently have a strong presence in both the direct channel and the broker network, and this purchase will round out our offering with a strong vendor finance presence.
“The CIT ANZ business has a strong balance sheet, with margins consistent with the bank’s stated intention of growing its higher margin portfolios. We expect the acquisition to be earnings per share accretive immediately from completion. However, this transaction will not have a material impact on our fiscal year 2010 results.”
The transaction is expected to close in the second quarter of the 2010 calendar year.