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Carfinco Financial Group (CFN.TO)
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Et ils viennent d'augmenter leur credit facility de 25M$. Ce n'est pas le genre d'annonce qu'on verrait s'il y avait vraiment péril en la demeure.
Je savais que de remonter ce fil mousserait le titre !
:ar!
Carfinco looks stateside
Barry Critchley, Financial Post
Carfinco Financial Group Inc. is a small (market cap of less than $250-million) niche player in the financial services business, providing consumer vehicle loans to borrowers unable to obtain financing through traditional lending sources. It has been a great investment in the 16 years it has been public, especially over the past five when it generated a total return of 3,260% - a mere 3,235 percentage points above the gain for the S&P/TSX composite.
Until this week, the Edmonton based company had plied its trade only in Canada. Now Carfinco has made its first acquisition south of the border: It laid out US$9.5-million to acquire massachusetts-based Persian Acceptance Corp. (PAC), a private indirect lender in the subprime retail automotive industry.
PAC has been around since 1998, works with more than 350 automobile dealers, operates in five northeastern states and has US$42.7-million in finance receivables. Carfinco, which has about $200-million of finance receivables, funded the acquisition with cash (US$9-million) and stock.
"It's a small step but an important one for the company," said one source familiar with Carfinco's plans. "It gets them into a bigger market."
And it's a market familiar to Carfinco. For instance, Tracy Graf, Carfinco's chief executive, said the company has been a member of the American Financial Services Association for many years, while he is a director of the National Automotive Association of the U.S. "We know the market space in the U.S., we know the programs and returns in the non-prime automotive finance market," he said.
And it was running up against constraints in its domestic market. "Organic growth is the only option for growth in our market segment. The U.S. made a lot of sense and there wasn't the potential for an acquisition in Canada," added Graf, noting that over the past fewmonths the company has signed a number of non-disclosure agreements with other potential auto finance companies.
"Persian fit within the parameters we had set. We were looking for a company with finance receivables of US$40-million to US$60-million that had a strong management team and which wanted to stay in place," said Graf. but unlike some acquisitions, Carfinco will not need to raise capital. It took care of that matter last April when it raised about $18-million from a share offering with each share priced at $9.75 a share.
At that time Carfinco didn't have a specific use of proceeds in mind. Instead it indicated "the net proceeds from the treasury offering will be used by the company to repay existing indebtedness, thereby increasing the credit available to fund future potential acquisitions and for general corporate purposes."
Investors liked what they were offered: The underwriters, a syndicate led by GMP Securities L.P. and including Stonecap Securities and Industrial Alliance Securities, exercised the overallotment option which raised another $2.25-million in cash.
With cash in hand, Carfinco went looking. One month later, ATB Financial joined Carfinco's four-member banking syndicate. Of the four, two are Canadian - bank of montreal is the other - and two are American, bank of America, N.A., and Wells Fargo Financial Corp. At that time, Carfinco's credit facility was hiked by $25-million to $205-million.
Idem, sauf si la compagnie a un moat régional.
A titre d'analogie, ce n'est pas parce que BAC fait affaire avec 40% des américains qu'une petite banque régionale ne peut pas l'exploser dans des petits coins de la Georgie en termes d'échelle.
Je ne suis par contre pas capable de déterminer si la partie US de Carfinco aura ou non un moat régional.
enfin faire un programme d'expansion dans le subprime, il vaut mieux être dans un contexte de baisse des taux. Ca ne reste que mon avis.
Farce à part, le titre avait connu le même plongeon à la même date l'an passé....