Provident Financial buys Moneybarn in £120m deal

14th Aug 2014 16:00

Lender Provident Financial has completed the acquisition of Duncton Group for £120m, the company announced on Thursday.Duncton and its subsidiaries operate under the Moneybarn brand and form the largest UK's non-standard vehicle finance group, operating mainly through brokers, but also through independent car dealers and online directly to customers.Provident said buying Moneybarn would broaden its product range and add a new source of income to existing growth opportunities.Moneybarn made pre-tax profit before interest and amortisation of £20.8m in the period to 30 June, while for the 2013 financial year the group reported audited pre-tax profit of £5.5m and gross assets of £151.6m.Provident said it will keep Moneybarn's existing management, led by Peter Minter.The group also plans to conduct a share sale worth £120m, representing about 4% of its market capitalisation, and use the net proceeds to fund a "significant proportion" of the Moneybarn takeover, while the rest of the acquisition will be funded with existing cash resources."The board believes the business is highly scaleable," Provident said in a statement.In a note to investors on Thursday, Canaccord Genuity reiterated its "hold" status for Provident shares with a 1,570p target price.Provident shares were up 0.87% to 2,083p at 11:21 on Thursday.DC