edeus parent company Oakwood Financial has today received a 300 million strategic investment from CIR, a publicly listed Italian investment company, and Merrill Lynch.
The investment, which is subject to approval by the EU, UK and Australian authorities as well as the positive result of due diligence, is expected to complete by the end of January 2007.
CIR and Merrill Lynch will each acquire a stake of approximately 45% in Oakwood with the remaining 10% held by minority investors and Oakwoods management team.
On completion CIR will make a cash injection of approximately 100 million euro, and will undertake to fund the development of new initiatives of the Oakwood Group to be decided on jointly with Merrill Lynch, for a further financial commitment of around 50 million euro.
Oakwood was founded in 2002 by its chairman and chief executive, Mike Culhane, to create, acquire and operate speciality consumer finance businesses across the entire lending spectrum, including brokering, processing, underwriting, servicing, trading, and securitising.
Oakwoods long term goal is to establish strong distribution platforms for its financial products in high-growth lending markets around the world supported by shared expertise, systems and funding strategies.
To date, Oakwood has created three businesses and acquired majority stakes in two others.
Pepper Homeloans was founded in 2001. It is now the third largest lender of residential non-conforming mortgages in Australia and has issued five RMBS securitisations.
One World Leasing was founded in 2003. Based in Manchester, One World originates small ticket leases using its advanced OneTouch online submission system.
Oakwood acquired a majority stake in Ktesios and Blue Motor Finance in 2006. Ktesios is one of Italys largest distributors of salary-secured personal loans.
Based in Rome, Ktesios generates originations in excess of 600 million per year.
Blue Motor Finance is a Manchester-based originator of non-conforming auto loans. Originally a broker, the company is now pioneering online decisioning in the UK non-conforming auto finance sector.
edeus is the most recently founded Oakwood company. Launched in September 2006, edeus offers non-conforming residential mortgages in the UK.
Using highly advanced technology it offers brokers the ability to complete mortgages faster than ever before.
While the companies of the Oakwood Group all operate independently with their own individual brands and have an in-depth knowledge of their local markets, they are able to achieve significant synergies with a centrally directed strategy and operational support at group level.
The Oakwood group, which employs over 400 people in the countries in which it operates, intends to extend its sphere of operations in markets with high growth potential (Italy and Spain in particular), developing new initiatives that build on the experience gained in Australia and in the UK.
In 2006 the Group is expected to reach a volume of loans originated of approximately 1.1billion euro.
Rodolfo De Benedetti, Chief Executive of CIR, says: This investment in Oakwood reinforces our strategy of expanding into high growth businesses with the potential of significant value creation.
“We are impressed by the results reached so far, by the commitment and the drive of Oakwoods management team, and we are happy to partner with a leading global financial institution like Merrill Lynch.”
Mike Culhane, chief executive of Oakwood, adds: This investment commitment comes at a crucial time in Oakwoods development.
“The company has grown to the point where we wanted to partner with long term strategic investors with the capacity to fund the development of our existing portfolio businesses, as well as financing our future activities.
“CIR and Merrill Lynch have the necessary financial agility, as well as offering important strategic benefits that will support the business over the long term.
“The calibre of investors we have attracted is a strong endorsement of Oakwoods business and, with their support I am looking forward to the prospect of leading Oakwood to the next stage of its development.