Isle of Man-based Manx Financial Group has agreed to acquire broker Blue Star Business Solutions, trading as Bluestar Leasing, in order to boost business for subsidiary Conister Bank.

A maximum of £4m (€4.6m) will be paid out to Bluestar’s co-founders and co-owners, Marcus Gregory and Mark Hayman.

Hampshire-based Bluestar Leasing brokers facilities in a number of spaces, including hospitality, catering, IT equipment and vehicles. It also operates in supply chain finance.

The Manx group said its flagship subsidiary Conister Bank, which already operates in asset finance, will write the majority of business originated by Bluestar.

The acquisition will be made through Bradburn, a subsidiary of Manx’s registered in August 2017, following approval from the Financial Conduct Authority.

It includes an upfront payment of £1.5m, 50% of earnings before interest and tax brought in by Bluestar in the three years following acquisition, and 50% of profits made from new business, also in the first three years under Manx ownership.

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By GlobalData

Following the acquisition, Douglas Grant, Manx group finance director, and Denham Eke, chief executive officer, will join Bluestar’s board.

Manx said the acquisition was part of a strategy to strengthen its position in UK brokerage. In its 2017 annual report, Conister Bank said it had severed ties with a “single UK introducer” which had left its exposed for £11.1m due to “disproportionate” commission cost.

Finance director Grant said on the acquisition of Bluestar: “The asset backed finance market in the UK recorded its seventh year of successive growth last year, led by the broker finance market, which grew 14% year on year. This is a market Conister Bank is active within, and [where it] indeed wrote more than £16 million of business last year.

“This acquisition will bolster our presence in this attractive market sector and act as a catalyst for future growth. Both Marcus and Mark have great experience in the UK broker market. [They] are keen to grow the business with our assistance, and I am equally keen to work with them to achieve this goal.”

Bluestar reported profits of around £100,000 in the year ending March 2017, the last period for which it published statements. The business said it funded £9m of loan proposals in the last 12 months.

Manx reported £25m in income and £2m in pre-tax profits for asset and personal finance in 2017.