FlexiGroup opens its equipment leasing books

The Australian listed finance company FlexiGroup is understood to have opened a data room for a potential sale of its Australian and New Zealand commercial equipment leasing operations.

However, while Scottish Pacific was earlier thought to be in exclusive talks to buy the assets, the thinking among some is that the price expectations of the company are too high.

Analysts estimate that the division, according to its most recently produced financial statements, is worth about $280m.

But FlexiGroup is understood to have an asking price on the asset of about $300m.

FlexiGroup earlier denied that a sale of its assets was on the cards. If it has an adviser, it is expected to be Citi.

$2.22 Flexi Group closed steady

Scottish Pacific has been on the hunt for acquisitions in the Australian market of late. It recently sounded out AxsessToday for a potential buy, along with Thorn Group.

Some believe that FlexiGroup, which is about 23 per cent-owned by founder and chairman Andrew Abercrombie, has been searching for a buyer for the assets for some time.

It comes as Westpac also remains eager to sell its equipment loans book, worth about $600m, according to sources.

The plan for FlexiGroup is understood to be one where it hives off its non-core assets to ramp up competition against “buy now, pay later” service providers such as Afterpay and Zip.

Some months ago, the company launched its buy now, pay later product, Humms.

$2.22 Flexi Group closed steady

FlexiGroup, an interest-free lender that partners with groups such as Harvey Norman, Ikea and Flight Centre, expects to make a cash net profit this financial year of between $75m and $80m.

For the 2019 financial year, the company generated a $61.7m net profit after swinging to a loss in the previous corresponding year.

The cash net profit for its commercial leasing division fell 69 per cent for the 2019 financial year to $7m.

$2.22 Flexi Group closed steady

Its Australian assets under management in the space are worth $337m, and $NZ159m in New Zealand.