Accord Financial closes sale of US portfolio assets

Accord Financial Corp. (TSX: ACD) announced the completion of a $63.2 million sale of its U.S. equipment leasing portfolio, held under Accord Equipment Finance (AEF), to a major privately held U.S. factor and finance company expanding into equipment leasing. The transaction, finalized on September 30, 2024, includes the transfer of AEF's lease portfolio and its professional team, ensuring continuity for clients. Gross proceeds amount to $63.2 million (US$46.8 million), with net funds allocated to reduce the company's primary banking facility. An additional US$400,000 in potential earnings is tied to portfolio credit performance through December 31, 2025.

The sale aligns with Accord's strategic review to refocus on core operations, including receivables finance and Canadian small business lending, while divesting non-core assets. The transaction is expected to strengthen Accord's tangible equity and balance sheet, supporting future growth initiatives. Simon Hitzig, President and CEO, emphasized the deal's validation of the portfolio's market value and operating platform.

Accounting adjustments, including the removal of $3.0 million in AEF-related intangible assets reported as of June 30, 2024, will be detailed in the company's third-quarter report. The Hovde Group, a U.S.-based investment banking firm, served as exclusive advisor to Accord during the process.

This move follows similar strategic actions, such as the recent sale of BondIt Media Capital, underscoring Accord's commitment to streamlining operations and enhancing shareholder value. With the transaction completed, management stated plans to pursue balance sheet initiatives to drive growth in 2025.