Background
- In April 2015, Banco Popular announced a strategic plan to increase the profitability of its businesses, strengthening consumer finance and international development among others
- For this purpose and after exploring other alternatives, in July 2016, Banco Popular agreed a partnership with Pepper, a listed Australian group specialised in consumer finance, and arranged it through the merger of Popular Servicios Financieros (PSF) and Pepper´s Spanish subsidiary. Finally, the alliance was resolved in early 2017 by changes in the strategic priorities of both sides
- DC Advisory acted as sole financial advisor to Banco Popular in this transaction
- Subsequently, after the change in the management of the bank, it was decided to divest certain non core assets. PSF was included in this list of non-strategic assets and in April 2017, the bank opted for the sale of 100% of that subsidiary
- PSF is a financial credit institution specialised in the granting of consumer loans at Point of Sale (PoS) and financing of automobiles, with presence in Spain and Portugal
- DC Advisory acted as sole financial advisor to Banco Popular in this new transaction
Process
- After a competitive process with several national and international candidates and with a very demanding schedule, Abanca agreed to purchase PSF
- The company will be integrated into Abanca Consumer Finance, an entity created in 2016 with the objective of strengthening its position in consumer finance
- The transaction, in line with Popular's strategy of divesting non-strategic assets, is positive for both parties for the following reasons:
- Banco Popular puts in value a business unit considered non-strategic at an attractive price
- Abanca relies on a consolidated platform with deep knowledge of the PoS sector, which allows it to position itself as a leading entity in the Spanish northwest. Abanca gains access to a relevant customer base to cross-sell other consumer finance products.
