Perth-based lenders Fair Go Finance and Capfin Money have announced plans to merge in a deal under which Frankfurt-listed MyBucks will sell a 60 per cent stake in the new entity to its former chief executive Tim Nuy.
Under the deal, FairGo will purchase Capfin, which previously traded as Spot Loans, for €7 million ($11 million).
This comes 19 months after Luxembourg-based fintech company MyBucks purchased a 75 per cent stake in FairGo for $3 million.
MyBucks said this month it was selling a 60 per cent stake in FairGo to Luxembourg-based Mr Nuy, who was set to start a new business in the Asia-Pacific region.
FairGo was established in 2008 and operates in the small persoanl loans market.
When the company was purchased by MyBucks in 2017, the Luxembourg company said FairGo had generated annual revenue of about $4.7 million with a loan book of about $11 million.
Based in Perth, Capfin also operates in the small loan market.
Its vendor was Pepkor Asia Pacific, which also owns retail group Best & Less.
FairGo chief executive Paul Walshe said the acquisition would double the company’s loan book.
“Capfin, or Spot Loans as it was known, is a well-run business with a similar compliance culture, which supports the customer retention as we integrate and grow,” Mr Walshe said in a statement.
“With a high degree of similarity between our two operating models, this acquisition will support the merged entity to pre-emptively adapt to possible regulatory changes and market developments that will materialise with the evolution of open banking, comprehensive credit reporting and the continued digital uptake in Australia.
“We have already gained significant market share from larger players over the last 12 months and the combined strength from this acquisition and our technology will continue to drive this migration and higher growth rates.”
In 2016, FairGo paid $34,000 in infringement notices for overcharging interst and establishment fees on payday loans following an investigation by the Australian Securities and Investment Commission.
