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