Accord Financial sold portfolio assets of Accord Equipment Finance (AEF), the company’s U.S. equipment leasing division. The acquirer is a 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.
Gross proceeds of the transaction are CAD$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 $400,000 based on portfolio credit performance through Dec. 31, 2025. The transaction closed on Sept. 30; the accounting calculations related to the transaction are being finalized, including the elimination of AEF-related intangible assets ($3 million reported at June 30, 2024), and will be reported in the company’s Q3/24 report.
“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,” Simon Hitzig, president and CEO of Accord, said.
The Hovde Group, a U.S.-based investment banking firm specializing in the financial services sector, served as exclusive advisor to Accord.
“With this significant transaction completed, we’re setting our sights on several balance sheet initiatives to support renewed growth in 2025,” Hitzig said.
