Idea Bank buys Getin Leasing, Poland’s biggest leasing company is underway
· Idea Bank’s purchase of Getin Leasing will be finalized within three years;
· Together, Idea Leasing and Getin Leasing will become the market leader with over PLN 6bn in annual sales and 15% market share;
· As the companies are specialized in different market segments, their integration will allow for applying economies of scale and further increase in market power;
· The deal is expected to generate PLN 40-80m of cost and income synergies over the next three years.
Idea Bank has signed a deal to take over Getin Leasing Group within the next three years. In the first stage of the transaction, to be executed by the end of March 2017, Idea Bank will buy 49,99% stake in Getin Leasing Group. The value of the deal stands at PLN 184,5m plus 49,99% in GL’s 2016 profits for the stake. In the next stages, to be finalized by the end of March 2018, Idea Bank will buy the remaining 50,01% stake.
‘We want to strengthen our position in the leasing industry. Two years ago we have taken over VB Leasing and we feel very satisfied with the way this part of business is developing. So we have decided to acquire another leasing company, currently ranked third in terms of annual revenues. Our goal is to create Poland’s number one provider in this segment, and most probably one of the biggest in this part of Europe’, offers Idea Bank’s CEO Jarosław Augustyniak. The combined company will exceed PLN 6bn sales, giving Idea Bank 15% value and 20% volume market share.
Idea Bank Group currently carries out its leasing activity through Idea Leasing, a company integrated with VB Leasing after its takeover in the first half of 2015. Idea Leasing operates in two different market segments: leasing and fleet management; but its main focus lies on financing purchases of heavy vehicles, machines and devices. Getin Leasing, on the other hand, is active in three segments: leasing and car loans, fleet management and insurance. It specializes in financing purchases of passenger cars. ‘We want to be a market leader in both financing purchases of cars and fleet management. We have great potential for that, as cars make up 70% of our clients’ fixed assets’, says Jarosław Augustyniak.
The first stage of the transaction will be finalized by the end of March 2017. ‘With full integration of Idea Leasing and Getin Leasing in mind, we will launch the process of unifying the companies’ operating models and executing the synergies as soon as possible’, announces Jarosław Augustyniak. The synergies will be possible on both the cost and income sides. ‘The purchase of Getin Leasing will give us access to app. 50 thousand new customers a year, mostly small business owners. We will be able to offer them products developed by Idea Bank Group’, stresses Jarosław Augustyniak. Cost synergies will be derived from areas such as IT, branch maintenance, operations and internal processes. Idea Bank’s CEO expects the deal to generate app. PLN 40-80m savings. In his opinion the combined company, focused on executing single business strategy and delivering innovations to the market, should generate over PLN 100m net profits a year.
The purchase of Getin Leasing is divided into three stages because Idea Bank Group wants to finalize the transaction of selling GetBack first. On March 15, 2016 a conditional deal was signed to sell the debt collector to a private-equity consortium for PLN 825m. ‘The process of selling GetBack is a very engaging and important one for us. We plan to launch the next acquisition once we finalize this transaction’, Idea Bank’s CEO informs, and adds that in order to maximize the synergies Getin Leasing will have to simplify its organizational structure, which will be taken care of in the second half of 2016.
Getin Leasing is an indisputable leader in financing car purchases. In 2015 the value of vehicles leased by GL amounted to PLN 3,4bn, and total value of property leased exceeded PLN 3,7bn, making the company the 3rd biggest in the Polish leasing market.
Idea Leasing has a strong market position in the segment of machines and heavy vehicles. In 2015 it financed purchases worth PLN 1,7bn. Total value of property leased by Idea amounted to PLN 2,5bn, landing it in the top 10 biggest leasing companies in Poland.