ersonal use only
SALE OF HUMMGROUP
CONSUMER FINANCE BUSINESS
18 February 2022
Authorised for release by the hummgroup Board of Directors humm group limited ACN 122 574 583
Level 1, 121 Harrington St, The Rocks, Sydney NSW 2000
SALE OF HUMMGROUP CONSUMER FINANCE BUSINESS
SALE OF CONSUMER BUSINESS TO LATITUDE
only | Today we are announcing the sale of hummgroup's |
use | consumer finance business (HCF) to Latitude. |
HCF comprises the BNPL, instalment and credit card | |
operations of hummgroup. | |
ersonal | hummgroup will retain full ownership of hummgroup's |
strongly performing commercial business and remain as a | |
standalone listed entity. |
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SALE OF HUMMGROUP CONSUMER FINANCE BUSINESS
SALE OF CONSUMER BUSINESS TO LATITUDE
Overview of transaction
CONSIDERATION FOR | Aggregate consideration of A$335 million representing 13.4x Cash NPAT1 and 1.8x P/NTA2 | ||
150 million Latitude shares3 plus $35 million in cash with proceeds to be fully distributed to HUM | |||
onlyHCF | |||
use | shareholders | flexicommercial, and | |
` | |||
COMMERCIAL | HUM will continue to fully own HUM's strongly performing Commercial business, | ||
will remain an ASX-listed company | |||
RATIONALE FOR | Combination of HCF with Latitude will create a leading and profitable pure-play consumer | ||
COMBINATION | finance business | ||
ersonal | HUM shareholders will be asked to vote on the HCF transaction and associated | ||
NEXT STEPS | |||
resolutions at a date to be determined | |||
1. Based on HCF 1H22 Cash NPAT of $12.5 million annualised. 2. Based on NTA of $190 million as at 31 December 2021 3. Subject to Latitude shareholder approval. Customary completion adjustments apply. Refer Note 2 of ASX announcement
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SALE OF HUMMGROUP CONSUMER FINANCE BUSINESS
STRATEGIC RATIONALE FOR HCF
Accelerating the growth of HCF as part of Latitude | |||
only | |||
Stronger | |||
Pure play consumer finance | |||
business | competitive position | ||
use | Build further on HCF's track record of | ||
More significantly sized and profitable pure | |||
play consumer finance company able to | award-winning products and services as | ||
compete at scale | part of a larger, profitable company | ||
Accelerated execution | Enhanced partner | ||
ersonal | proposition | ||
ofstrategy | |||
Access to additional capital to accelerate | Stronger value proposition for merchants, | ||
domestic and international market share | retailers and customer partners | ||
growth | |||
Logical owner of HCF
HCF will become Latitude's BNPL brand, building on HUM's investments in brand, product and customer experience
Compelling proposition for shareholders
Compelling valuation for HCF, combined with the opportunity to participate in the benefits and synergies arising from the combination
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SALE OF HUMMGROUP CONSUMER FINANCE BUSINESS
COMPELLING VALUE PROPOSITION
Latitude has offered an aggregate consideration of $335 million for HCF4
As consideration for HCF Latitude has | • HUM shareholders will receive approximately $0.68 per share, consisting of 0.30 | |
ffered: | Latitude shares and $0.07 cash | |
only | • By receiving Latitude shares as consideration, HUM shareholders could further | |
• | 150 million Latitude shares5 | |
• $35 million in cash | benefit from any potential enhanced scale and efficiencies of Latitude's enlarged | |
consumer finance platform | ||
use | ||
• HUM shareholders will retain full ownership of the flexicommercial business, | ||
which will continue as a well capitalised ASX-listed company | ||
After completing the sale of HCF and distributing the share and cash consideration to | ||
HUM intends to distribute the entire | ||
HCF consideration of | shareholders, HUM expects that it will have unrestricted cash, which will be first applied | |
150 million Latitude shares and $35 | to the retirement of its perpetual note (c. $55 million est. as at 30 June 2022). | |
million in cash to shareholders | Thereafter, the HUM Board will take a disciplined approach in allocating the | |
ersonal | remaining unrestricted cash between investing further in the accelerated growth | |
of the Commercial business and capital management initiatives | ||
4. Assuming a Latitude share price of $2 per share. 5. Subject to Latitude shareholder approval. Refer note 2 ASX announcement for further details. | ||
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Humm Group Ltd. published this content on 17 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 February 2022 23:50:01 UTC.