Marshall Motor has sold its leasing division to Bank of Ireland UK, who will incorporate it into its car and asset finance arm, Northridge Finance.
The deal was worth £42.5m. Marshall also granted use of their trademarks over the next five years for a further £500k. Northridge is awaiting the Financial Conduct Authority’s approval to complete the acquisition.
In a statement explaining the rationale for the sale, Marshall Motor said: “Eight of the top ten UK motor leasing businesses are owned by financial institutions or vehicle manufacturers. The Board therefore believes that the future growth of Marshall Leasing (MLL) is better supported under different ownership and is pleased to have agreed a sale of MLL to Bank of Ireland.”
It added that cash flow from the acquisition would be directed at reducing the Group’s £101.1m debt. Marshall Leasing would also fulfill all loan and liabilities obligations before the incorporation.
Daksh Gupta, chief executive officer for Marshall Motor Holdings, said: “The strategic disposal of our leasing business … further strengthens our financial position and allows us to remain focused on driving our core retail operations.”
He added: “MLL has been an important part of our Group for many years. On behalf of the Board I would like to thank all my leasing colleagues for their significant support and contribution over this period and wish them well for the exciting times ahead under new ownership.”
James McGee, managing director for Northridge, said: “This is an exciting opportunity which represents a positive addition to our motor asset based lending business. This will enable Northridge Finance to offer a wide range of products, providing added value to our intermediary partners.
Marshall Leasing was established in 1979 and based in Cambridgeshire. It has a fleet of around 6,000 vehicles and provided finance, fleet management and daily rental services with a focus on SMEs.