Credit Corp (ASX:CCP)
has acquired the assets of Radio Rentals from financial services provider Thorn Group (ASX:TGA)
for $60 million.
The debt buyer entered into a binding agreement with Thorn, a trade mark of Radio Rentals. Radio Rentals gives customers access to a range of tech products on rentals term and offers solutions for differing circumstances.
The total consideration is subject to completion adjustments and will be funded from existing cash reserves. The transaction is expected to complete in December this year.
The company said most of the consideration is attributable to the existing lease receivables book, which is expected to produce Credit Corp’s targeted investment return. In addition to the existing lease receivables, Credit Corp is acquiring the intellectual property, systems and supply chain arrangements of the, now online, Radio Rentals business.
“Credit Corp provides the cheapest and most sustainable finance to the Australian credit impaired consumer market and our entry into this new segment will be consistent with that approach,” said CEO Thomas Beregi.
The company also revised its earnings guidance for 2022 based on the transaction. Net profit after tax was $85-95 million and has been revised to $92-97 million.
Shares in Credit Corp (ASX:CCP)
are trading 8.9 per cent higher at $32.89.