Five Arrows Leasing is currently owned by Five Arrows Leasing Holdings Limited, which is part of Rothschild & Co.
Five Arrows Leasing was formed in 1988 and has been owned by Rothschild & Co since 1996. It offers a range of asset finance products, through its subsidiary brands, to UK SMEs, including equipment, vehicle and construction equipment finance and is also a provider of lease servicing.
At its last audited balance sheet, Five Arrows Leasing had assets of £245.1 million financed by £42.9 million of shareholders’ funds and a £178.0 million loan from Rothschild & Co.
This transaction is expected to complete by 3 November 2015, when the equity consideration will be paid by Paragon Bank and the inter-company debt refinanced via Paragon Bank’s retail deposits. Five Arrows Leasing’s loan book currently stands at around £240 million financed by a £193 million loan from Rothschild & Co.
The acquisition is expected to take Paragon Bank from its expected break-even level in 2016 to profitability.
Five Arrows Leasing will form the basis for further SME finance development within Paragon Bank and it will be re-branded in the near future to reflect its change in ownership. In addition to its successful savings programme, Paragon Bank intends to deliver a range of offerings in the UK mortgage, consumer lending and SME markets over the coming years through a combination of organic and acquisitive developments.
Nigel Terrington, Chief Executive, said:
"I am delighted that we have acquired Five Arrows Leasing, a business we have admired for many years as a market leader in the asset finance sector. The acquisition provides the opportunity to continue pursuing our strategy of diversifying the Group's income streams, building strong and sustainable earnings growth and enhancing our return on equity.
“The Five Arrows Leasing culture, philosophy and operating model is an excellent fit with the Group and we look forward to working with their management team and to supporting growth opportunities across the SME markets."
