1pm, the fast-growing Bath-based specialist lender, has made its first acquisition with the takeover of a firm providing equipment finance and broking.
1pm, which last Friday announced it was seeking bolt-ons to continue its rapid expansion, this week said it was paying up to £12m in cash for MHH Holdings, a Lancashire-based group which undertakes both own book and brokered-on business. 
1pm writes all its business on its own book. It also announced the placing of 10.8m new shares to raise £6.5m and issuing 1.27m new shares to raise £773,000 to pay towards the acquisition.
Acquiring MHH, which operates under the Academy Leasing name, would allow it to write more of its own business from its own funds, said 1pm, while raising its own presence in the UK funding market by providing access to a new pool of customers, including Academy’s vehicle leasing business.
The move will allow both companies to negotiate reduced borrowing rates for customers from lenders.
Academy’s owners, Mike Nolan and Hazel Jacques, will stay with the enlarged business and will join 1pm’s board – Mr Nolan as chief strategic officer and managing director of Academy and Ms Jacques chief marketing officer.
MHH achieved pre-profits of £1.87m on revenues of £5.14m in the year to March 31.
1pm chairman Ian Smith said: “The acquisition of MHH substantially increases the size of our business and significantly expands both our customer base and our portfolio of products and services.
“It presents considerable potential for growth and further product development. The MHH management team bring with them many years of valuable industry experience and we look forward to working together to further enhance shareholder value.”
Academy’s Mike Nolan added: “The acquisition will help to bolster continued growth into the future. Academy Leasing will continue to trade under its own name and we are committed to further strengthening its brand as part of the enlarged group. It’s good news for the whole team.”
1pm is paying £6m in cash to MHH on completion of the takeover, £2.38m through 3,576 new shares, also on completion, up to £2.61m through up to 3.92m new shares, subject to MHH’s performance, and £1m through the issue of vendor loan notes.
Last Friday 1pm, which is listed on the London Stock Exchange’s AIM market, reported pre-tax profits for the year to May 31, up by 20% to £1.62m on revenues up 31% at £5.5m on a surge in new business and a significant increase in business loans. It also announced it would pay its first dividend to shareholders.
Its loan book has grown from £6.5m to £30.1m over the same period while its stock market value has increased from £1.5m to around £2 m – growth achieved entirely organically.
