Bank of Queensland today completed the purchase of the international equipment finance business of UFJ Finance Australia Ltd, representing approximately $1 billion of assets.
The operations of the former UFJ Finance Australia Ltd will merge with Bank of Queensland's own existing equipment finance operation. UFJ Finance Australia Ltd will change its name to BOQ Equipment Finance Ltd.
The new operation will oversee a receivables book worth around $1.2 billion, comprising 33,300 active contracts and nearly 18,000 customers.
Bank of Queensland has paid approximately $13.6 million for UFJ Finance Australia Ltd, including a premium of $7 million over the net book value. This represents a price multiple of 1.1 times estimated normalised book value at acquisition.
The purchase of UFJ Finance Australia Ltd from its Japanese parent UFJ Australia Ltd was funded by:
- $30 million in ordinary equity through an underwritten placement to institutional investors;
- $62 million in ordinary equity through an underwritten renounceable rights issue to shareholders;
- $25 million in new reset preference shares (S1RPS) through an underwritten placement; and
- debt funding for the remainder of funding requirements.
Bank of Queensland Managing Director David Liddy said the purchase fitted with the Banks overall strategies of diversifying geographically and in terms of asset class and of strengthening its revenue streams.
We continue to grow our interstate footprint, building on our recent purchase of the country's second largest third party ATM supplier, ATM Solutions Pty Ltd.
Additionally, the purchase of UFJ Finance Australia Ltd will allow the Bank to achieve significant economies of scale in its existing equipment finance operation and re-energise Australia's $20 billion equipment market with another major player, Mr Liddy said.
The announcement comes just a week ahead of the Banks profit result for the year ending 31 August 2003, expected to be towards the upper end of broker analysts' forecasts.