- Propel Holdings (TSX:PRL), a fintech stock providing credit to underserved consumers, has signed a definitive agreement to acquire QuidMarket, a digital lender in the United Kingdom
- The company will pay US$71 million in cash to be financed through a concurrent C$100 million offering
- Propel is a fintech company facilitating access to credit for consumers underserved by traditional financial institutions
- Propel Holdings stock has added 232.22 per cent year-over-year and 163.34 per cent since inception in 2021
Propel Holdings (TSX:PRL), a fintech stock providing credit to underserved consumers, will acquire U.K.-based digital lender QuidMarket for US$71 million in cash to be financed through a concurrent C$100 million offering.
Founded in 2011, QuidMarket specializes in the same underserved market segment as Propel, but with a focus on short-term installment loans. The company has originated more than 310,000 loans since inception, establishing a track record of growth and profitability. For the year ended June 30, 2024, QuidMarket generated revenue and net income of US$27.7 million and US$9.6 million, respectively.
The move positions Propel as a leading digital direct lender in the United Kingdom, a market “where demand for credit exceeds supply” and the addressable market exceeds 20 million, according to Thursday’s news release, with current QuidMarket management slated to continue operating the business.
Propel stated it believes the acquisition will accelerate growth and be “immediately accretive” to 2024 and 2025 adjusted earnings per share, driven by synergies through AI technology, capital resources, as well as financial and operational expertise.
QuidMarket complements Propel’s existing ventures in North America, including lender Fora Credit and an embedded lending partnership with financial services company KOHO in Canada and lending-as-a-service partnerships in the United States.
After the closing of the acquisition in Q4 2024 or Q1 2025, Propel expects to operate the combined business with a debt-to-equity ratio of approximately 1.3x as of June 30, 2024. This modest use of leverage is supported by robust revenue growth of more than 144 per cent from US$129.65 million in 2021 to US$316.49 million in 2023 – making it one of the fastest-growing companies in Canada – which it has more than justified with net income growth of more than 320 per cent from US$6.56 million to US$27.78 million over the period.
Leadership insights
“The acquisition of QuidMarket will accelerate Propel’s growth and is a critical step in our journey to becoming a global leader,” Clive Kinross, Propel Holdings’ chief executive officer, said in a statement. “When we went public three years ago, we set a goal to grow globally. As disciplined operators with a track record of profitable growth, this acquisition had to meet our strict acquisition criteria, including a favourable operating jurisdiction, a strong cultural fit and to be financially accretive to our shareholders. QuidMarket serves a market of more than 20 million underserved consumers in the U.K., where the demand for credit far exceeds supply. Backed by Propel’s AI-powered technology, financial and operational expertise and capital resources, we believe QuidMarket will be able to accelerate its growth while broadening access to credit for more underserved consumers. The QuidMarket team has demonstrated deep experience and a customer focus that sets them apart. United by a shared purpose, together we will build a new world of financial opportunity for consumers globally.”
About Propel Holdings
Propel is a fintech company facilitating access to credit for consumers underserved by traditional financial institutions. The company’s AI-powered platform has issued more than 1 million loans and lines of credit and more than $1 billion in credit to date.
Propel Holdings stock (TSX:PRL) is down by 10.02 per cent trading at C$27.94 per share as of 10:04 am ET. The stock has added 232.22 per cent year-over-year and 163.34 per cent since inception in 2021.
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