Axis Auto Finance, a Canadian subprime auto finance company, acquired fellow subprime lessor Trend Financial in a deal that will double Axis’ portfolio size to approximately $110 million, the lenders announced last week.
The transaction is valued at $29.3 million and is expected to close around April 2.
Axis and Trend were formerly competitors operating in the same market. Axis likened the relationship between the two companies as the “Pepsi and Coke” of the subprime auto finance market in Ontario, founder and President Ilja Troitschanski told Auto Finance News.
While the two lenders share a dealer overlap of about 75%, Axis wanted to acquire Trend because it filled many of the check marks Axis looks for in a company.
“When we look at acquisitions, the things we’re looking at are size, culture, the portfolio, and marketshare,” Troitschanski said. “[Acquiring Trend Financial] lets us increase scale by doubling the portfolio, we connected to double our revenue base, and we now have two sales teams that used to compete against each other, who now can work together to hit more dealerships and drive more origination.”
Trend Financial is an independent, subprime auto finance company headquartered in Ontario. Since its inception in 2012, it has originated over $125 million in consumer automotive loans and, as of Jan. 31, the company had net loans receivables totaling approximately $54 million.
Axis plans to extend nationwide by yearend and has been acquiring companies to achieve this goal. Earlier this year, Axis acquired Cars on Credit Financial, a Canadian independent, nonprime auto lender, for $11 million in cash. At the time, the acquisition doubled Axis’ portfolio to nearly $60 million.
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