Accord Financial Closes $63.2 Million Sale of US Leasing Portfolio Assets
Accord Financial Corp. (TSX – ACD) (“Accord” or the “Company”) today announced the successful sale of portfolio assets of Accord Equipment Finance (“AEF”), the Company’s US equipment leasing division. The acquirer is one of the largest privately held factor and finance companies in the United States, now expanding into equipment leasing. Along with the portfolio of leases, AEF’s team of professionals are joining the acquirer, which will ensure a seamless transition for the Company’s valued clients.
Gross proceeds of the transaction are $63.2 million (US$46.8 million), which is expected to have a positive impact on Accord’s tangible equity. Net proceeds will be used to pay down the Company’s primary banking facility. Accord will have the opportunity to earn an additional US$400,000 based on portfolio credit performance through December 31, 2025. The transaction closed on September 30th; the accounting calculations related to the transaction are being finalized, including the elimination of AEF-related intangible assets ($3.0 million reported at June 30, 2024), and will be reported in the Company’s Third Quarter Report.
The announcement follows on the Company’s previously announced review of strategic initiatives, including efforts to refocus on the core business and create shareholder value. “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,” stated Simon Hitzig, Accord’s President & CEO.
The transaction is an important step in Accord’s strategy to refocus on its core business. Since its founding in 1978 the Company has steadily built its North American market position in receivables finance, including asset-based lending and factoring. Accord is also committed to expanding its presence in the Canadian small business finance sector, which has shown strong growth in the last five years. This transaction aligns the Company’s capital with these divisions, which are positioned to compete and grow.
The Hovde Group, a US-based investment banking firm specializing in the financial services sector, served as exclusive advisor to Accord.
Looking ahead, Mr. Hitzig added, “With this significant transaction completed, we’re setting our sights on several balance sheet initiatives to support renewed growth in 2025.”
About Accord Financial Corp.
Accord Financial is North America’s most dynamic commercial finance company providing fast, versatile financing solutions including asset-based lending, factoring, inventory finance, trade finance and film/media finance, along with a full suite of lending and leasing solutions for Canadian small businesses. By leveraging our unique combination of financial strength, deep experience and independent thinking, we craft winning financial solutions for small and medium-sized businesses, simply delivered, so our clients can thrive.
For further information, please visit www.accordfinancial.com or contact:
Irene Eddy
Senior Vice President, Chief Financial Officer
Accord Financial Corp.
40 Eglinton Avenue East, Suite 602
Toronto, ON M4P 3A2
(416) 961-0304
ieddy@accordfinancial.com
Forward-Looking Statements
This news release contains certain “forward-looking statements” and certain “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management’s beliefs, expectations or intentions regarding the financial position of the Company, and the duration of the suspension of the quarterly dividend announced in November 2023. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties including the ability of the Company to reinstate dividends and those risks identified in the Accord’s periodic filings with Canadian securities regulators. See Accord’s most recent annual information form and most recent management’s discussion and analysis of results of operations and financial condition for a detailed discussion of the risk factors affecting Accord. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.