01 April 2015
STAR Capital Partners continues its consolidation of the SME asset finance market after completing the acquisition of Ignition Credit plc, a leading independent asset and vehicle finance provider to UK SMEs
STAR Asset Finance’s broader strategy is to provide a significant alternative source of finance for SMEs, the engine room of the UK economy
Having been established just nine months ago, STAR Asset Finance is set to arrange over £90 million of financing for 1000s of SMEs, over the course of 2015
STAR Capital Partners (“STAR”), a leading European fund manager, announces
today that it has acquired Ignition Credit plc (“Ignition” or the “Company”) via
STAR Asset Finance Limited (“STAR Asset Finance”), a company established to
consolidate independent asset finance providers across the UK. Ignition represents
the third acquisition by STAR since its inception in July 2014.
A unique element of the strategy is to provide owners of asset finance businesses
with the opportunity to take an equity participation in the longer term growth and
value creation associated with a much larger asset finance entity which has balance
sheet strength, critical mass and economies of scale. Through STAR Capital’s
diversified investor base and debt facilities, the vehicle has significant levels of
additional capital available to invest. The long term intention of STAR Asset Finance
is to create a broader funding platform for the SME market, which could include a
peer-to-peer lending capability.
Ignition is a leading independent provider of asset and vehicle finance in South West England. Its core activity is the provision of hire purchase and leasing facilities to SMEs. One of Ignition's strengths is that it has the ability to act as a principal lender whilst having long-standing relationships with a large number of funders. This allows the Company to provide a wide range of competitive financing packages to its customers. Ignition arranges financing for all types of assets ranging from plant and machinery to vehicles and business equipment. Financings range from £1,000 to £1 million per transaction.
The Company will continue to be run by its existing management team consisting of Alan Tutte, Steve Hunt and Paul Caunter. The three Directors have been working 2 together successfully for many years and have a deep understanding of the markets they operate in. As part of the transaction, Alan, Steve and Paul will become investors in STAR Asset Finance.
Commenting on the announcement, Paul Gough, Partner at STAR, said:
“Our strategy is to bring successful asset finance businesses together under STAR Asset Finance and support them to achieve their growth ambitions. Collectively, STAR Asset Finance will arrange over £90 million in financing for UK SMEs in 2015, often providing funding to growing businesses that are not adequately supported by their banks. We hope to grow our financing volumes organically and through selective acquisitions in the years to come.”
Sam Geneen, Chairman of STAR Asset Finance, said:
“Ignition represents a highly attractive business with a strong track record of profitable growth and an impressive management team. In addition to expanding our geographical reach, the Company further extends our financing capabilities for SMEs by creating a focused offering for plant and machinery as well as vehicles. We welcome Alan, Steve and Paul and look forward to working together.”
Alan Tutte, Managing Director of Ignition, said:
“By being able to arrange finance
quickly and at competitive terms, we have been able to establish Ignition as the
leading independent provider for asset and vehicle finance in the South West. Today,
over 70% of our business is generated from existing customers or customer referrals.
We look forward to being an active partner in STAR Asset Finance where I believe
Ignition will play an important role in realising the group’s strategy.”
Today’s announcement provides another example of STAR’s strategy to acquire attractive businesses for future growth in partnership with existing management.