Time Finance has agreed to a £55.1m cash takeover by Bentley Park, the parent company of specialist lender Ultimate Finance. The deal would create one of the UK’s larger independent lenders to small businesses.
Under the recommended offer, shareholders in Time Finance, which provides asset finance, invoice finance, business loans and asset-based lending, will receive 59.1p in cash per share. That values the AIM-listed lender at about £55.1m.
The price is a 12.6% premium to Time Finance’s closing price on 14 August and a 27.5% premium to its average over the previous six months. But it is only just above the 52-week high, so shareholders may wonder why the board did not put up more of a fight.
Bentley Park said combining Ultimate Finance with Time Finance would create a scaled, multi-product lender with a net loan book of nearly £650m, better placed to serve UK small and medium-sized businesses across their working capital and asset finance needs. The deal’s multiples present very good value for the acquirer.
Time Finance has grown its loan book for 20 consecutive quarters. It reported £37.1m of revenue and £7.9m of pre-tax profit in its last full year, with a net loan book of around £218m by the end of June.
Time Finance’s board, advised by Cavendish, unanimously recommended the offer. It called the terms fair and reasonable and said they provided shareholders with an attractive premium and full liquidity, along with the flexibility to pursue growth outside the constraints of public markets.
Bentley Park has already secured support from shareholders, including the Time Finance directors, representing about 47% of the company. Yet another AIM company is set to leave.
