Macquarie Bank is launching an equity raising after closing a $8.2 billion deal to buy the ANZ Bank’s Esanda vehicle finance unit.
The acquisition, to be folded into Macquarie Leasing, will increase Macquarie’s total motor vehicle finance portfolio to about $17 billion, up from $9 billion.
Esanda has net lending assets with a book value of $7.8 billion, implying Macquarie is paying a $400 million premium.
“This acquisition will represent a continuation of Macquarie’s growth in annuity-style businesses,” says Macquarie Group CEO Nicholas Moore said.
Macquarie expects to fund the acquisition from existing funding sources, plus third party financing and a capital raising.
The initial capital requirement for the acquisition is expected to be $800 million, which will be met from a $400 million institutional placement, an associated plan for eligible shareholders and existing capital.
A price hasn’t been set for the share placement. Further details will be revealed at he first half result announcement on October 30.
The financial close for the acquisition is expected to happen before the end of this month.
However, the deal is expected to cut forecast results in the second half of Macquarie’s 2016 year. The result is expected to be lower than the first six months to the end of September but higher than the corresponding period in 2015.
However, Macquarie’s guidance is still for better profit in the 2016 year as a whole than in 2015.
Macquarie also says it expects the interim dividend to be about $1.60 per share franked at 40%, up from $1.30 in 2015.
The bank posted a 27% rise in profit to $1.604 million for the year to the end of March, well ahead of market expectations and its second best result on record.