23/11/2023
Under the deal, Banco Invest S.A. will spin off the business unit dealing in pawn loans (Credito Economico Popular) into a Newco fully owned by the current shareholders of Banco Invest, and subsequently Kruso Kapital shall acquire 100% of the Newco’s share capital. Kruso Kapital shall pay a consideration, inclusive of goodwill, of 11 million euros, subject to adjustment mechanisms at closing.
The pawn loans business, operating under the Credito Economico Popular brand, in 2022 generated a total income of about 3 million euro (1.5 million euro in the first half of 2023) and a net income of about 1.1 million euro (0.5 million in the first half of 2023). The business unit comprises sixteen branches, distributed across the entire Portuguese territory, with a strong presence in the Lisbon and Porto regions.
Through this acquisition Kruso Kapital accelerates its growth and globalization course, while staying focused on high-return low-risk assets. In effect, pawn loans, by their own nature, are a highly profitable business, and are also characterized by a low capital absorption as more than 90% of loans are backed by gold assets.
The deal is subject to certain conditions precedent, among which the Bank of Portugal’s authorization to proceed with the above-mentioned spinoff as well as the green light by the Bank of Italy. More details are going to be disclosed at the closing of the deal, which according to the agreements between the parties should take place within the first half of 2024.
Gianluca Garbi, Managing Director of Banca Sistema and Chairman of Kruso Kapital remarked: “We are satisfied with this important step Kruso Kapital has taken towards fostering its growth in foreign markets, in Portugal. The deal falls under the Group’s strategic plan for the pawn loans business, which in the last three years reported a loan increase from 78 million to 117 million as at 30 September 2023.”
Attached below are the balance sheet and the income statement of Gruppo Kruso Kapital as at 31 December 2022 and 30 June 2023, with the Credito Economico Popular-branded pawn loans business included in the consolidation scope on a pro-forma basis.
