Non-bank lender Resimac has completed its takeover of asset finance lender International Acceptance Group.
Resimac snapped u the remaining 40% of IA Group a year after acquiring a 40% stake in the company. Resimac chief Scott McWilliam told The Australian that IA Group’s performance during the COVID-19 pandemic convinced him to exercise the option to buy the remaining stake ahead of schedule.
“IA Group was tested during a very difficult and challenging period, and the book and business has performed, I’d argue, better than anybody else in that space,” McWilliam said in an interview with the publication. “Having had the opportunity to look at that business and how it operates and performed during a challenging period, it obviously gives us a lot of confidence that it was the right acquisition and a great starting point for the Resimac group to move into the asset finance space.”
Resimac purchased its initial controlling stake in Sydney-based IA Group in January 2020, The Australian reported. The non-bank said the purchase supported its strategy to diversify and expand into new secured asset classes. The deal gave Resimac the option to acquire the remaining 40% of IA Group for $8 million.
IA Group, founded in 2001, has a loan book of $80 million. It offers lending products including asset finance, secured business loans, personal loans and car loans. It serves both consumers and businesses.
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After Resimac takes full ownership on 1 February, it will be rebranded as Resimac Asset Finance and join other businesses within the Resimac Group, including Resimac, Resimac NZ and homeloans.com.au.
Snapping up IA Group is a natural step for Resimac, McWilliam told The Australian.
“Diversification is a key strategy for the continued growth of Resimac Group, and Resimac Asset Finance will play a major role moving forward,” he said. “While IA Group is already profitable today, our objective is for it to be a significant contributor to the group’s profitability within the next five years.”
IA Group’s loan book has ballooned by more than 50% over the past year, The Australian reported.
“It’s off a low base, but we’ve seen enough to know we like the credit we’re originating,” McWilliam said. “The performance of that book, in terms of deferrals, has been exceptional. At the high, deferrals were 3% of the book; today that sits at less than 1%.”
The purchase comes as Resimac accelerates its strategy to improve its technology and credentials as a digital non-bank mortgage lender. The company’s transformation project started a year ago and is expected to complete in the 2022 fiscal year.