The company said the acquisition of Azule, which provides funding and leasing services for the broadcast and media industry, offers revenue synergies with its existing asset finance operations and will immediately enhance earnings.
PCF said Azule has strong vendor relationships with top broadcast and media equipment manufacturers, a team of 17 sales and finance professionals, the ability to originate more than £50mln of asset finance per year, a history of robust profits and £16mln portfolio of receivables with an exceptionally low impairment charge.
Azule will be purchased for an initial consideration of £4.1mln, including £3.3mln in cash and the rest in PCF shares. An additional earn-out of up to £1.5mln over two years will be paid depending on performance criteria.
"The acquisition of Azule is a clear demonstration of the mutual advantages offered by the acquisition of an established asset finance business by PCF,” said PCF chief executive Scott Maybury.
“As part of PCF Bank, Azule will be able to access a lower cost of funds enhancing profitability, enabling faster growth and accelerating PCF's achievement of portfolio growth targets.”
The acquisition will be funded using existing cash and capital resources. The deal is subject to approval by the Financial Conduct Authority, which is expected shortly.
In the year ended 30 June 2018, Azule generated £54.3mln of asset finance, reported revenues of £3.1mln, a profit before tax of £0.8mln and gross assets were £17.9mln.