PCF Bank has agreed to acquire media equipment lessor Azule Finance for £5.6m (€6.3m), which will give it access to a previously untapped asset class and a post-Brexit foothold in Europe.
Founded in 2004, Azule focuses on broking and financing audiovisual equipment, and has partnered with manufacturers and distributors such as Midwich. Its £16m receivables portfolio covers “a niche class of business-critical assets with strong collateral characteristics and lending to prime credit grade customers”.
Slough-headquartered Azule has subsidiaries in Germany and Ireland, with operations spanning most European markets. The subsidiaries are set to give PCF Bank – which has so far operated only in the British market – a precious foothold in the EU, at a time when UK-headquartered firms are seeking a base on the continent to hedge against a possible loss of “passporting” rights as a result of Brexit.
PCF, which is eyeing a £750m portfolio by 2022, said there was “potential of a European distribution channel for vendor relationships” as a result of the acquisition.
Azule reported revenues of £3.1m for the year ending June 30, along with a profit of £800,000. The lessor originated £54.3m of asset finance business during the year.
Scott Maybury, chief executive at PCF, said: “Our acquisition strategy is focused on the diversification of both our asset classes and routes to market. Azule ticks both boxes and is immediately earnings enhancing.
“As part of PCF Bank, Azule will be able to access a lower cost of funds enhancing profitability, enabling faster growth and accelerating PCF’s achievement of portfolio growth targets.”
Peter Savage, chief executive of Azule, added: “The next phase of growth … will be business as usual, with enhanced capability and flexibility via access to PCF’s retail deposits.”
London Stock Exchange-listed PCF is hoping for the Financial Conduct Authority to clear the acquisition by its full-year trading updated later this month.