Ian

Another independent factoring company about to be taken over

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Rumours have come to my ears that Metro Bank are currently doing due diligence on SME Invoice Finance. Whilst I originally didn’t intend to name the factoring company Sky News have published details so I have now edited my original post to include the name.

If anything further happens you won’t read it here first as I’m off on vacation next week 🙂

Amendment added 02/08/13

In actual fact the takeover has been signed, sealed and delivered and a public announcement will be made after the weekend.

This is an interesting takeover where the benefits to SME Invoice Finance are immediately obvious and I have been assured that the company will continue to be run the same way as before which I think is really good news as the service they offer their clients is first rate.

Ultimate Finance takeover confirmed

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The take-over bid was announced this morning and Ultimate Finance will become a wholly owned subsidiary of the Renovo Group PLC which commented that it wished to become a prominent provider of credit facilities for UK SMEs and that the Renovo Board will continue to evaluate further acquisitions and alternative routes to access funding for SMEs at commercial rates which are accretive to the strategy.

I’m still uncertain why a cash rich shell company would wish to get involved with a factoring company that is struggling to make any real headway in a market sector that is itself struggling. Renovo claim in the offer document that they will be “continuing to innovate the business model through a more technology focused platform” but as anyone who knows Ultimate will be aware any problems that they have in the marketplace aren’t technology based but are more to do with continually changing direction coupled with a revolving door policy with sales staff that has now probably made it difficult to attract good new salesmen

Another interesting comment in the document was “The recommended acquisition of UFG is the first step in implementing Renovo’s strategy of building a new force in SME lending and growing considerably in an underserved sector” I don’t know who was telling them that the factoring market is underserved but whoever it was probably has a rapidly expanding nose as most of us insiders feel that there are too many players in a market that has been going nowhere for the last few years

Ultimate Finance takeover

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Ultimate Finance has received an approach from Renovo Group PLC that may or may not lead to a takeover bid in the legalese jargon of the Stock Exchange.

Ultimate have confirmed that discussions have been on going with Renovo which is a non trading company with a net asset value of £27m and a previous history in the pharmaceutical industry.

To the outsider this is a very unusual fit as Renovo is a shell company with no expertise in any form of finance let alone a niche product like invoice finance and it does make me think why, with a history in pharmaceuticals they have decided that a factoring company is the way forward for them.

It makes me wonder if there is more to this than meets the eye and if Renovo Group are in league with someone else who does have industry expertise – but there again I’ve always loved a conspiracy theory 🙂

What’s going on at Aldermore

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Keen readers of the factoring blog will have read my “What’s going on at Aldermore” post last week where I was lucky enough to spot a software glitch in LinkedIn and take a screen grab before it disappeared.

It seems that at least one of the three people being “honoured” didn’t see the funny side and complained to Aldermore management and I had a phone call today from the Legal Counsel and Company Secretary of Aldermore Bank PLC who said that if I didn’t remove the blog post they would consult external lawyers with a view to prosecuting me for defamation.

It seems that not only do the staff of Aldermore Invoice Finance have no sense of humour but they also don’t have much of an idea of what constitutes defamation as nothing that I said was defamatory in the slightest. In the interests of harmony I have removed the post but if anyone looking for a factoring company deems a sense of humour to be important I’m sure that you’ll know know where not to look 🙂

ABFA Code of Conduct

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All of the factoring companies that we deal with are committed to the new ABFA code of conduct with training sessions being held to ensure that all staff members fully understand the Code.

The factoring companies are contacting their introducers to confirm that they are fully compliant with the code and outlining the terms on which they will do business with the brokers. We have already seen and responded to a fairly lengthy agreement from one of our panel of factoring companies and have today received a much shorter version from another factor which I thought I would reproduce in part so that those sceptical onlookers could see how seriously this matter is being taken:-

“As a member of the Asset Based Finance Association (ABFA), XYZ Factors is committed to implementing the new Code of Conduct which comes into effect from 1st July 2013.

The aim of the Code is to ensure that clients are treated with honesty and fairness with all facilities operated in a professional and transparent manner.

With these principles in mind the code requires that:

All terminology relating to notice periods, termination fees and collect out fees must be clear and transparent. All collect out fees will need to be justifiable and the ABFA Member may have to provide confirmation of how the collect out fee was calculated.

Furthermore the Code does not allow for any payment to a third party of any portion of a collect out fee.”

Needless to say Factoring Solutions is more than happy to subscribe to those ideals and will in fact only deal with factoring companies who are fully committed too