- Approximately $1.2 billion (Canadian) equipment finance portfolio
- Continues strategic focus on growth of commercial activities
- Adds complementary inventory financing capabilities to address the needs of commercial customers
MONTREAL, QUEBEC — Laurentian Bank of Canada ("Bank") (TSX:LB) announces that it has reached a definitive agreement under which a subsidiary of the Bank has agreed to acquire Northpoint Commercial Finance, which is among the leading U.S. and Canadian inventory finance lenders with a portfolio of approximately $1.2 billion (Canadian) as at March 31, 2017. The transaction is expected to close before the end of fiscal 2017, subject to customary closing conditions, including applicable regulatory notifications and approvals.
The Bank believes Northpoint Commercial Finance, which was founded in 2012, is one of only a few diversified inventory finance companies that provides the scale needed to serve North American manufacturers and their dealer networks.
"We are delighted to announce this acquisition that will increase the proportion of revenue generated by commercial activities within the bank mix, which is expected to improve its overall profitability," said Francois Desjardins, President and Chief Executive Officer of Laurentian Bank of Canada. "We continue to make excellent progress on our transformation plan initiatives, including, among others, the optimization of our retail banking activities and the development of our core banking system, the backbone of our digital offer."
"This acquisition is an excellent strategic fit with our equipment finance subsidiary, LBC Capital, resulting in an attractive end-to-end equipment finance platform. It will broaden our Canadian offering and create a US presence, an important customer attribute for manufacturers and dealers looking for a single North American point of service," added Stéphane Therrien, Executive Vice President, Personal and Commercial Banking at Laurentian Bank. "Northpoint team members led by Chief Executive Officer, Dan Radley, have years of experience in inventory financing, unique expertise and strong client relationships with leading companies. We are very happy to welcome them as they join the team under the leadership of Éric Provost, Senior Vice President, Commercial Banking at Laurentian Bank and President of LBC Capital."
The Bank believes this acquisition will be accretive to its earnings per share in the first full year of operation and by approximately 4% in 2019. Based on the anticipated assets on closing and the related equity financing, it is expected the Bank's Basel III Common Equity Tier 1 ratio would be maintained within the guided 7.8% to 8.2% range. The Bank plans to finance the acquisition through a $225 million (Canadian) subscription receipts equity financing (the "Equity Financing") and existing balance sheet liquidity.
All dollar amounts are expressed in Canadian dollars.
About Laurentian Bank
Laurentian Bank of Canada is a financial institution whose activities extend across Canada. Founded in 1846, its mission is to help customers improve their financial health and it is guided by values of proximity, simplicity and honesty.
The Bank serves one and a half million clients throughout the country and employs more than 3,600 individuals, which makes it a major player in numerous market segments. The Bank caters to the needs of retail clients via its branch network based in Quebec. The Bank also stands out for its know-how among small and medium-sized enterprises and real estate developers owing to its specialized teams across Canada. Its subsidiary B2B Bank is, for its part, one of the major Canadian leaders in providing banking products and services and investment accounts through financial advisors and brokers. Laurentian Bank Securities offers integrated brokerage services to a clientele of institutional and retail investors.
The Bank has more than $43 billion (Canadian) in balance sheet assets and more than $32 billion ( Canadian) in assets under administration.
About Northpoint Commercial Finance
Headquartered in Alpharetta, Ga., with approximately 90 employees, Northpoint Commercial Finance has a leading presence in financing a range of products across major industries through relationships with hundreds of manufacturers and thousands of dealers across the U.S. and Canada. Led by an experienced management team, averaging 25 years of experience, Northpoint offers diversified financial solutions such as inventory lending and floor plan finance. As a knowledgeable lender, Northpoint offers a wide array of program structures to meet the needs of original equipment manufacturers, distributors, resellers, and dealers in a variety of commercial product industries. The team offers a creative, flexible and personal approach combined with innovative technologies, and streamlined processes. For more information about Northpoint's product offerings, visit www.northpointcf.com.