Westpac Group sells Strategic Alliances business

By Edil Corneille

Westpac Group announced today that it has entered into an agreement for the sale of its Vendor Finance business to Angle Finance, a portfolio company of Cerberus Capital Management, L.P. Angle Finance is a non-bank asset finance company that services small and medium-sized enterprises. It specialises in offering equipment finance up to $200,000 for transport, construction, materials handling, and earthmoving equipment.

Vendor Finance supports third parties to fund small ticket equipment finance loans to around 42,000 Australian businesses. The transaction is expected to result in the transfer of around $500 million of customer loans.

Chief Executive, Specialist Businesses, Jason Yetton stated, “The sale represents the first transaction of the Group’s simplification initiatives and brings certainty for Vendor Finance customers and new opportunities for our people.”

Given the relatively modest size of the portfolio, the sale is expected to have a negligible impact on Westpac’s balance sheet and capital ratios. There is expected to be a small accounting loss on sale due to the transaction being structured with an initial payment on completion and deferred consideration payable over the two-year period following completion, as mentioned by Westpac.

Completion of the transaction is expected to occur at the end of April 2021.

Vendor Finance currently operates out of the Westpac subsidiary Capital Finance Australia Limited (CFAL). Westpac will continue to retain and manage the remaining CFAL Equipment Finance business in its Business Division.

Based in Melbourne, Angle Finance commenced operations in September 2019. Cerberus Capital Management, L.P, is an alternative investment company and has recruited a highly experienced management team, invested in a technology platform, and built a national reach via its service offering to finance brokers to allow it to expand into its chosen equipment finance markets.