Subprime Lender Axis Looks to Buy in Ripe Canadian M&A Market

Axis Auto Finance is “optimistic” that the current Canadian subprime lending field is ripe for acquisitions, and is looking for opportunities to buy, said Ilja Troitschanski, president of the auto lender.

The Ontario-based company has been growing through an expansion of its dealer network and deepening relationships with existing partners. Those efforts have led to a 100% growth in revenue, year over year, since its inception in 2013, according to a March financial release.

“We’re working to grow [revenue] the way we have, but if you look to the future, there might be consolidation, as well,” Troitschanski told AFN. “Certainly for us, it’s one of the avenues of growth we would look at — to buy and acquire other companies.”

Fragmentation in the Canadian market — especially among subprime lenders such as Autonum Capital Inc., Carfinco Inc., and Trend Financial — is the key reason the company is considering acquisitions. Like Axis, many new players entered the market after the recession, but some entered the market for the wrong reasons, Troitschanski said.

“The people who think it’s easy money, they run into difficulties down the road. Their underwriting is not up to standard, they run out of money, or they can’t access any more financing,” he said. “So all these reasons lead to companies being for sale, and certainly we’ve been looking at potential acquisitions.”

The company grew originations 48% in 2016 to $17.7 million, according to its earnings report.