Allied Farmers To Acquire Nationwide Finance

Allied Farmers To Acquire Nationwide Finance

Allied Farmers Limited and Hanover Financial Services Limited today announced that they have entered into a conditional agreement for Allied to acquire 100% of the shares in Nationwide Finance Limited for a purchase price of $33 million.

Nationwide has total assets of approximately $160 million and equity of $20 million. The company was established in 1973 and is a successful business financing company which has helped New Zealand businesses grow for more than 30 years through the financing of plant, premises, equipment and transport.

The agreement is conditional on the approval of Nationwide’s trustee and the shareholders of Allied Farmers Limited, and is targeted to take effect at the end of April 2007.

Allied Farmers Group Chief Executive David Bale says the purchase of Nationwide is consistent with Allied’s strategy of focusing on property and commercial financing.

“We are extremely pleased to have secured Nationwide Finance. It has a strong reputation in the New Zealand finance industry and will add value to the wider finance activities of the Allied Farmers group, enhancing our market presence and platform for future growth. We also recognise that the management and staff of Nationwide is one of the company’s most important assets and we will be taking over responsibility for them as part of the sale agreement.”

“Having a finance business with $320 million in assets will allow Allied Farmers to achieve synergies from its existing relationships with farmer clients. The Finance companies will be able to offer financing instruments that cover Allied Farmers extensive involvement in the Dairy industry through livestock, and rural services throughout New Zealand. It is planned that the synergies will expand as Allied Farmers also grows its Rural business. The combination of Allied Prime Finance and Nationwide Finance will provide us with significant market presence and a solid platform for future growth across the whole Group” said David Bale.

Hanover Group Chairman Greg Muir says the sale of Nationwide signals Hanover’s intention to continue to focus on its core businesses of property financing, property investment, private equity/M&A and the growing consumer finance arm of MyBuy in Australia and FAI in New Zealand. The sale process was conducted in-house through Hanover’s M&A team, led by Group CFO Brent Pattison.

“Nationwide occupies an important niche in the business financing sector, but, while we have grown the business significantly during our ownership, its focus on asset and leasing finance is not core business for Hanover. We see in Allied Farmers well matched competencies and the ability to grow and develop Nationwide into an even more successful operation.”

As Allied Farmers will be assuming the Nationwide debenture book, one of the important considerations for Hanover in the sale process was the quality of the acquirer. Allied Farmers has a long history and is seen by Hanover as an organisation with a strong business and strong values, able to provide for the needs of Nationwide debenture holders now and in the future.

ENDS

© Scoop Media