Accord Financial Transitions with $63.2 Million Asset Sale

Accord Financial Successfully Completes Asset Sale

Accord Financial Corp. (TSX – ACD) has recently achieved a significant milestone with the successful sale of portfolio assets from Accord Equipment Finance (AEF), its US equipment leasing division. This strategic move highlights the company’s commitment to enhancing its operations while also demonstrating its valuation in the private market. The transaction has garnered attention as it pairs Accord’s established reputation with the growth of its acquirer, one of the largest privately held factoring and finance companies in the country.

Financial Impact of the Transaction

The gross proceeds from this transaction amount to $63.2 million (approximately US$46.8 million). This will positively impact Accord’s tangible equity as the company actively works to streamline its finances. The net funds will primarily be allocated to reduce the liabilities from the company's primary banking facility. Moreover, Accord is in a position to potentially earn an additional US$400,000 based on portfolio credit performance until December 31, 2025.

Operational Benefits and Strategic Realignment

Along with the sale of the lease portfolio, the professional team from AEF will join the acquiring company. This transition is set to ensure that the clients of Accord continue receiving quality service. The sale comes in line with the ongoing efforts to refocus on Accord’s core business areas, aiming to unlock additional shareholder value.

Strategic Goals for Future Growth

Simon Hitzig, Accord’s President & CEO, expressed optimism about the company’s future endeavors. He stated that this deal exemplifies the intrinsic value of Accord’s assets. The company has been focusing on its strengths in receivables finance, particularly in asset-based lending and factoring since its establishment in 1978.

Expanding Presence in Small Business Finance

Accord is aligning its capital with business divisions that are primed for competition and growth. The Canadian small business finance market has seen substantial development over the past five years, presenting Accord with lucrative opportunities. The company is dedicated to expanding its footprint in this sector while fostering quality financial solutions across North America.

Advisory Support for the Transaction

The Hovde Group, an investment banking firm based in the US and specializing in financial services, played a crucial role as exclusive advisor to Accord in this transaction. Their expertise has been invaluable during this pivotal change for the company.

Looking Ahead: Initiatives for 2025

Mr. Hitzig also mentioned that, following the completion of this crucial transaction, the company is setting ambitious goals for various balance sheet initiatives aimed at fostering renewed growth leading into 2025. Accord is well-positioned to capitalize on the changes within the financial landscape.

About Accord Financial Corp.

Accord Financial has emerged as a dynamic force within North America’s commercial finance sector, providing a plethora of financing solutions including asset-based lending, factoring, inventory finance, trade finance, and film/media finance. The company is renowned for offering fast, versatile funding options tailored to the needs of small and medium-sized enterprises, leveraging its robust financial framework and extensive experience to deliver exceptional service throughout the industry.

Frequently Asked Questions

What is the significance of the $63.2 million asset sale?

The asset sale is expected to enhance Accord’s tangible equity and provide additional capital to strengthen its financial position.

Who is the acquirer of Accord's leasing portfolio?

The acquirer is one of the largest privately held factoring and finance companies in the United States, which is now expanding into equipment leasing.

What will be done with the net proceeds from the sale?

Net proceeds will primarily be used to pay down Accord's primary banking facility, improving its financial stability.

How does this transaction align with Accord's strategy?

This transaction aligns with Accord’s strategy to refocus on its core business and unlock shareholder value through targeted initiatives.

What are Accord's plans for future growth?

Accord is looking to expand its presence in the Canadian small business finance sector and aim for renewed growth initiatives in 2025.

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