IDS, a US-based provider of equipment finance, asset-based lending and factoring, has agreed to acquire White Clarke Group, a UK-based provider of asset finance software and services. The financial terms of the deal have not been disclosed.
In a statement, IDS said the fusion of the two companies would combine to create a multi-asset class secured finance technology powerhouse supporting banks, independents, OEM captives and specialist finance firms globally.
Together, the combined company will serve more than 300 customers across North America, Europe and the Asia Pacific and will be co-headquartered in Minneapolis, MN and Milton Keynes, UK, the statement said.
David Hamilton, chief executive of IDS, said: “Global business has entered a new long-term investment cycle driven by the rapid evolution of technology.
“Smart factories, connected-assets (IoT), green-energy, and many other technological innovations will bring about exciting new economic growth opportunities which will require access to capital from secured finance firms.
“With a comprehensive and flexible technology foundation, these finance providers will be able to support new funding models accelerating the move to digital, servitization, and mobility.
“Supporting this fast-changing market need is the motivation for bringing our two great companies together creating an unmatched range of secured finance solutions and the ability to support customers globally.”
Brendan Gleeson, group chief executive of White Clarke Group, said: “Our industry is being disrupted by a global shift in consumption.
“Consumers and businesses want utility and outcomes, not ownership. This has created an opportunity for financing firms to tap into emerging technologies including digital and AI to create new business models like subscription and car-sharing.
“As these trends accelerate, these firms will need the support of a global technology vendor that can deliver innovation at scale.
“Combining our companies provides the ability to innovate at the pace of change while delivering exceptional value to our combined customer base.”
IDS is acquiring White Clarke Group from Five Arrows Principal Investments, who originally invested in the business in 2016 and will remain a shareholder in the combined company.
Five Arrows Principal Investments (FAPI) is the European private equity arm of Rothschild & Co’s Merchant Banking business which has a series of funds dedicated to corporate private equity, credit, primary and secondary fund investing and co-investments.
Vivek Kumar, partner at Five Arrows Principal Investments, said: “We are very excited about the combination of IDS and White Clarke Group, and look forward to helping in the creation of value in the combined company over the next few years.”
Five Arrows was advised by Robert W. Baird & Co and Shoosmiths LLP.
IDS and Thoma Bravo, an IDS investor, were advised by Kirkland & Ellis LLP.
Thoma Bravo is a private equity firm focused on the software and technology-enabled services sectors. The PE company had more than $76 billion in assets under management as of December 31, 2020.
A.J. Rohde, a senior partner at Thoma Bravo, said: “We’re thrilled to support IDS in taking this transformational step.
“IDS and White Clarke Group have both invested in building industry-leading solutions which serve many of the worlds top financial services and automotive brands. The combination creates an exciting and truly unique proposition for the secured finance market, with a world-class team and global scale.
The transaction is expected to close before the end of Q2 2021.