BOQ to Acquire CIT Vendor Finance, Australia
BRISBANE and NEW YORK — 27 / 26 April 2010 — Bank of Queensland Limited (BOQ) (ASX: BOQ), a leading Australian financial institution, and CIT Group Inc (“CIT”) (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, today signed a purchase agreement under which BOQ will acquire Sydney-based CIT Group (Australia) Limited and CIT Group (New Zealand) Limited (“CIT ANZ”).
BOQ will 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 providing finance to customers of a number of well known vendors. The transaction is expected to close in the second quarter of the 2010 calendar year. As part of the transaction, CIT ANZ intends to repay its outstanding fixed and floating rate notes (ISIN: AU300CGAL010 and ISIN: AU300CGAL028).
BOQ currently has a successful equipment finance book of approximately AUD $3.4 billion (US$3.2bn) and the acquisition of CIT ANZ represents around 15% of this book. At 31 December 2009, CIT Group (Australia) had AUD $525 million (US$485m) in assets and approximately 125 employees.
BOQ Managing Director David Liddy 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,” Mr Liddy continued. “We currently have a strong presence in both the direct channel (our branch network) 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 FY10 results.”
Mr Liddy also said that the Bank intended to operate CIT ANZ as a stand-alone business, “CIT ANZ has a strong and experienced management team with the ability to expand and grow the business, and our intention is that they will continue to manage the operations and drive this growth. This is a significant and important partnership for BOQ and we are looking forward to working with CIT on an ongoing basis to continue to bring global opportunities to the local business.”
Ron Arrington, President of CIT Vendor Finance, said, “This decision supports CIT’s ongoing efforts to more efficiently operate its Vendor Finance business. The divestiture reduces our exposure to the consumer market, allows us to focus on our core commercial business, and ensures that we are aligned with strategy and market conditions. We will continue to maintain our global vendor franchise, with a strategic presence around the world.”
Keith Rodwell, Managing Director of CIT Group (Australia), said, “We remain committed to providing our vendor partners and customers with the quality service they have come to expect. We anticipate a seamless transition and look forward to joining the BOQ team.”
About Bank of Queensland Limited
Established in 1874, Bank of Queensland (ASX: BOQ) is a leading Australian financial institution and an ASX100 company. Customers have access to a national branch network, with more than 260 branches Australia wide, as well as one of the most widespread ATM networks in the country. www.boq.com.au
About CIT Group (Australia) Limited, Australia
CIT Group (Australia) Limited is one of the leading providers of vendor based, equipment finance and leasing in Australia. It works with manufacturers, dealers and resellers to provide leasing and financing packages to consumers, businesses, government agencies and education providers. The group’s equipment financing solutions include operating leases, fixed-term rentals, consumer loans and leases. It is a leading financier of IT, office technology and motorcycle assets.
Founded in 1908 and headquartered in New York City, CIT (NYSE: CIT) is a bank holding company with more than $45 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual, and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and vendor finance. www.cit.com
BOQ was advised by Rothschild Australia. CIT was advised by KPMG Corporate Finance and Allens Arthur Robinson.