Private equity investor Cabot Square Capital has acquired BPN Crédito, the consumer finance provider, from the Portuguese Government for an initial investment of EUR36 million.
Formerly the consumer credit arm of Banco Português de Negócios (BPN), which was nationalised by the Portuguese Government in 2008, BPN Crédito specialises in motor finance, primarily for used cars, in the Portuguese market.
As well as its primary activity of originating and servicing auto loans, BPN Crédito also provides leasing for both equipment and real estate, and has factoring capabilities. The face value of BPN Crédito’s outstanding loan assets is in excess of EUR200 million. It currently employs 184 people.
Cabot Square Capital believes that BPN Crédito’s well-established distribution network and experienced management team will provide an excellent platform to increase the loan book significantly following the acquisition. Cabot Square Capital is putting in place a funding facility to support this expansion. Cabot Square Capital is also assessing the possibility of BPN Crédito acquiring further assets, including existing Portuguese consumer loan portfolios, as part of its expansion.
Tarun Sharma, Investment Director at Cabot Square Capital, says: “Portuguese consumers have seen their credit options reduced sharply since the credit crunch, and with the economy showing an improvement, the Portuguese consumer credit market represents an opportunity for growth.”
“BPN Crédito has an experienced management team that has worked together for a long time and we are looking forward to leveraging this platform and growing, both organically and inorganically.”
“We plan to substantially increase the amount of finance BPN Crédito provides within a short period, and that will be aided by the excellent relationships the business has maintained with car dealership networks throughout Portugal.”
The acquisition of 100% of BPN Crédito’s share capital will be made in collaboration with a Portuguese private equity firm, Eurofun. As part of the transaction, Eurofun’s principal, Luis Monteiro D’Aguiar, will become the Executive Chairman of BPN Crédito.
Luis Monteiro D’Aguiar has over 20 years of experience in banking, including as CEO of three consumer finance companies. His background includes both corporate and retail banking roles at Riggs National Bank and Westpac Banking Corporation.
Cabot Square Capital has an 18 year history of building leading financial services businesses. Cabot Square Capital manages funds on behalf of long-term institutional investors and is currently investing its fourth fund.
