Turners buys finance firm

Turners Ltd has entered into an unconditional agreement to buy Christchurch-based Southern Finance, which incorporates South Island Vehicle Finance and K Finance, for $5 million. The company specialises in used-vehicle finance and has been active in the South Island for about 20 years. It loans are originated through car dealers, finance brokers, strategic partnerships and direct lending. Paul Byrnes, chief executive officer of Turners Ltd, says: “The acquisition provides the ideal base for us to increase and grow our market share in the South Island. We will continue to operate it under the Southern Finance brand. “We expect the business to contribute around $750,000pa earnings before interest and tax with this increasing to $1 million after the first year. Additional synergies will arise in areas such as insurance, IT and compliance costs, although we have not factored these in to our forecast returns.” The purchase price is for the net assets of about $3.3m and goodwill of $1.7m. The consideration will be paid in cash on the settlement date of July 31 and will be funded from bank borrowings. Turners Ltd’s chairman, Grant Baker, adds the acquisition of Southern Finance meets all of Turners’ merger and acquisition criteria. “It fits perfectly with our strategic plan. We are continuing to evaluate further consolidation, merger and acquisition opportunities.”