Finance & Insurance

Canada Drives officially debuts in US, UK after pilot program

VANCOUVER  - 

Fintech business Canada Drives has now officially expanded to both the United States and the United Kingdom, launching USA Drives and UK Drives. 

The Vancouver-based company, which along with its group of companies, provides an avenue for consumers to obtain online auto financing and personal loans. It conducted six-month pilot programs in the U.S. and U.K. and is now working with tens of thousands of customers there.

Canada Drives plans to open offices in those countries within a year and double its employee headcount in Canada.

“We are really encouraged to see such early success from both customers and financial partners as we’ve expanded our services into these new markets,” Canada Drives founder Cody Green said in a news release.

“This early traction has proven to the team that we’re not only best-in-class in Canada, but our combination of technology and superior customer service is clearly in demand outside of our home borders.”

The company launched a pilot program in Australia in 2017. That program is still in pilot mode, said a company spokesperson.



TransUnion spots 3 positive trends coming out of Q1

TORONTO - 

From a “torrid” auto sales pace to delinquency improvement in the Oil Patch, to perhaps Canada being in better position than its neighbor to handle the clash over trade with the United States, Matt Fabian shared plenty of positive developments stemming from TransUnion Canada’s latest Industry Insights Report.

Fabian, director of research and analysis for TransUnion Canada, began a conversation with AuSM Canada by highlighting that first-quarter auto loan volumes increased by 3.7 percent year-over-year, driven by an 8.5 percent increase in new auto loan originations.

Meanwhile, delinquency rates in the auto sector — contracts at least 60 days past due — fell by 12 basis points in Q1 to 1.7 percent.

“From our perspective, as the U.S. auto market has softened over the last several quarters we’ve been waiting for that to happen in Canada but it hasn’t,” Fabian said. “The first quarter of 2018 again we saw a record January and February, so there is still a torrid pace in terms of vehicle sales, which has fueled a lot of growth in auto loan volumes. We’ve seen a very active auto space.

"The risk protocols from the different auto lenders and the governance they’ve had have been pretty effective. Despite in the backdrop of a growing economy, growing auto sales and increased consumer debt, we still see fairly good risk behavior,” he continued.

TransUnion reported the average balance carried on their auto loans in Q1 stood at $20,786, a 3.5-percent rise year-over-year.

Oil patch improvement

Spurred by improved economic conditions and the continued recovery in oil prices, TransUnion found that oil producing regions such as Alberta and Saskatchewan are beginning to experience improvement in their respective consumer credit markets.

Fabian explained that improving credit performance in these provinces is arriving nearly four years after the start of rapid oil price declines at the end of 2014. Lower oil prices negatively impacted the local economies heavily tied to the energy industry.

In the summer of 2015, TransUnion published a report that projected credit product delinquencies in these regions to deteriorate at a faster rate than the rest of the country as a result.

Delinquencies did, in fact, rise in both Alberta and Saskatchewan. However, Fabian pointed out that Q1 may have been a turning point since TransUnion spotted the first significant annual decline since 2015.

TransUnion found that serious consumer delinquency rates (90 or more days past due) dropped by 15 basis points in Alberta and 39 basis points in Saskatchewan.

Signs of Recovery: Delinquency Rates Declining in Oil Provinces

Consumer 90+ Day Delinquency Rates Canada Alberta Saskatchewan
 Q1 2018   5.43%  6.50%  6.54%
 Q1 2017  5.71%  6.65%  6.93%
 Q1 2016  5.70%  6.39%  6.53%
 Q1 2015  5.79%  6.15%  6.26%

Source: TransUnion Canada

“We may be seeing the beginning of the consumer rebound in the oil producing regions out west.  Economic conditions have been improving for a few quarters, as employment improves across the country,” Fabian said. “This is particularly good news for consumers in Alberta and Saskatchewan, as they were most negatively impacted by the oil crash from a few years ago.”

TransUnion recapped that oil prices reached $100 (USD) in Q1 2014, according to the U.S. Energy Information Administration, before declining to $48 in Q1 2015 and even further to $35 in Q1 2016. However, oil prices are back on an upswing and reached $63 as of Q1 of this year.

At the same time, Fabian mentioned unemployment levels in both Alberta and Saskatchewan have improved over the last few years. Alberta’s unemployment rate continued a strong downward trend to 6.3 percent in Q1 from 7.9 percent in Q1 of last year while Saskatchewan dipped slightly during that same timeframe — from 6.0 percent to 5.8 percent, according to data from Statistics Canada.

TransUnion also found that consumers in these regions also are limiting their debt exposure.

Analysts found that average non-mortgage debt balance per consumer in Alberta and Saskatchewan grew below the national average in Q1 from the previous year, at 1.9 percent and 2.5 percent respectively. The national average rose 4.5 percent in that same timeframe to $29,181.

“In times of crisis, we often see debt balances on products such as credit cards rise at greater rates, as consumers use credit increasingly to make ends meet. It is therefore a positive sign to see to see the use of credit in the oil provinces actually grow more slowly than the country overall rate,” Fabian said.

“When we compare the oil-producing provinces versus the non-oil-producing provinces, there is still a bit of a gap, but the encouraging thing is the trend,” he continued.

“It’s something we’ve been waiting for as the economy has rebounded,” Fabian went on to say. “It’s going to be a long tail for risk. You usually don’t see a recovery in delinquency happen until several months after. As the economy is coming around, we’re starting to see good signs.”

General credit trends

TransUnion also indicated the first quarter of 2018 was highlighted by continued solid performance by Canadians in most parts of the country.

The number of consumers with access to credit increased by 1.2 percent on an annual basis to close Q1 2018 at 28.6 million. The 90- days past due average consumer delinquency rate also dropped on an annual basis by 28 basis points to 5.4 percent in the same timeframe.

Accounts entering collections status also declined by 21 percent to 0.7 million between Q1 2018 and Q1 2017.

The overall risk tier mix of Canadian consumers in TransUnion’s national consumer credit database improved in Q1 2018, with 68 percent of consumers considered prime or better — a 2.2-percent increase over last year. The super prime (lowest risk) segment grew the most with an increase of 76 basis points, while the proportion of subprime (highest risk) consumers in Canada declined by 36 basis points from last year.

“We continue to see strong consumer credit performance over the past year, with apparently limited impact due to the rising interest rate environment. This dynamic is something we will continue to monitor,” Fabian said.

Talking trade

Much has been publicized about the trade discussions involving Prime Minister Justin Trudeau and President Donald Trump, who are both laying out the positions of Canada and the U.S., respectively.

Without delving into the politics of these trade exchanges thus far, AuSM Canada asked Fabian about the potential implications on dealerships and auto finance companies, depending the severity of tariffs implemented.

“From the auto sector, it could affect productivity and output, depending on what tariffs are put on and how the negotiations go,” Fabian said. From a manufacturing and output perspective, it’s going to effect to impact manufacturers, which could in turn lead to things like layoffs or reduced production. There could be pockets of Canada in the auto producing regions, like Ontario, affected from a broader macroeconomic scale and unemployment.

“It also could lead to higher auto prices based on the tariffs that could affect demand from a dealer and sales perspective. That might be the thing that triggers the slowdown in vehicle sales,” he continued.

“But honestly the biggest hit is going to be on the U.S. There is going to be a serious shortage going into the United States as a result,” Fabian went on to say. “The United States doesn’t necessarily have more capacity to build more vehicles. The prices of vehicles in the U.S. could go up quite radically.

“It's going to affect both sides, but from a Canadian perspective you’re going to see those pockets that have a reliance on manufacturing,” he added. “We might see more stress in those areas. I don’t know if it will manifest itself any more than that, but there is that potential headwind.”

Canadian franchised dealers continue to value finance-company relationships

TORONTO - 

As much as technology has enhanced the way Canadian dealers can find inventory that turns quickly while securing financing for their customers, personal relationships still matter, especially when it comes to store management and its F&I activities.

For the second consecutive year, dealers in Canada continue to stress the importance of the dealer-finance company relationship and are more satisfied with providers that not only understand their needs, but also consistently exceed their expectations. Those findings surfaced this week as a part of the J.D. Power 2018 Canadian Dealer Financing Satisfaction Study.

As the auto retail financing industry becomes more commoditized, the J.D. Power survey showed dealers cite “people relationships” and “ease of doing business” as the top two reasons for their selection of a financing provider. The importance of these two reasons are echoed both by captive and non-captive finance companies.

The survey revealed factors such as dealer compensation and competitive rates are also relevant in the provider selection decision, but are of secondary importance to customer service-related reasons.

“The marketplace in Canada continues to be strong, yet highly competitive, so relationships are what make the difference,” said Jim Houston, senior director of automotive finance at J.D. Power.

“Lenders can adjust their credit policy, interest rate or dealer compensation plans, but it’s how they interact with dealers and resolve issues when they arise that have the greatest effect on satisfaction,” Houston said. “When overall satisfaction increases, dealers are more willing and able to deepen the business relationship with lenders.”

The study, now in its 20th year, found that problem resolution and the speed with which an issue is rectified significantly affect dealer satisfaction levels. Moreover, it’s the credit department that bears the load and acts as the first port of call when things go sour.

Six in 10 dealers (60 percent) indicate that credit desk personnel are the first point of for any problems or concerns. Additionally, 76 percent of dealers said they were able to engage with credit staff when needed.

“While both captive and non-captive lenders’ credit departments perform well in making themselves available, lenders should not rest on their laurels,” Houston said. “Instead, they should maintain a sense of urgency when responding to dealers, as satisfaction levels plummet when the credit department is not readily available.

“Leveraging various communication channels and technology coupled with adequate credit department staffing are some measures in which lenders can demonstrate their commitment and differentiate themselves to increase satisfaction,” Houston went on to say.

Two other additional findings from the latest survey included:

• Finance company selection influenced by more than just relationships: Beyond the relationship influence, dealers have different views of satisfaction depending on the type of finance company with which they are doing business. Dealers who work with captives place higher importance on the provider’s customer loyalty rebates (27 percent) than those who work with non-captive finance companies (4 percent).

In contrast, dealers that choose to do business with non-captive finance companies place a greater importance on dealer compensation (13 percent), compared with those that choose to work with captives (4 percent).

• Sales performance requires improvement: In a highly competitive and fragmented market, J.D. Power learned that exceeding expectations becomes a paramount differentiator. The study found that dealers hold their finance company sales representatives to a higher set of standards, yet sales representatives exceed expectations less than half of the time.

Finance company rankings

Overall dealer satisfaction in the captive segment is 875 (on a 1,000-point scale), a 7-point increase from 2017. Overall satisfaction in the non-captive segment is 862, a 4-point decrease from 2017.

Mercedes-Benz Financial Services ranked highest in the captive segment with a score of 948. Ford Credit (903) ranked second, while Honda Financial Services (883) came in third. Toyota Financial Services (878) ranked fourth.

Among non-captive finance companies, TD Auto Finance ranked highest with a score of 884. Bank of Montreal (881) came in second, and RBC Royal Bank (868) placed third.

The 2018 Canadian Dealer Financing Satisfaction Study captured 4,861 finance provider evaluations across the two segments from new-vehicle dealerships in Canada. The study was fielded in February and March.

Why Canadian institutions leverage US auto ABS market

TORONTO - 

The U.S. financial market might become an even more important catalyst for car sales in Canada, too.

As Canadian auto sales have been on the rise, two of the Big Six Canadian banks have turned to the U.S. term asset-backed securities (ABS) market for additional fuel, according to a report published on Monday by S&P Global Ratings.

As in the U.S., S&P Global Ratings pointed out that Canadian banks are a major source of auto financing for consumers. Additionally, analysts noted the re-emergence of captives, which has accelerated the availability of vehicle leases, has been driving strong Canadian auto sales over the past few years.

Not only are annual vehicle sales up, but S&P Global Ratings said in the report titled, Canadian Auto Lenders Are Taking ABS on a Road Trip Across the Border, that many consumers have been opting for a brand new car rather than used. S&P Global Ratings tabulated that about 81 percent of total vehicle sales in 2017 were for new models, representing approximately 2 million units sold.

Since offering its first issuance in 2016, the Bank of Nova Scotia (Scotiabank) has completed four U.S. cross-border auto loan ABS transactions through its Securitized Term Auto Receivables Trust (START). In 2017, Bank of Montreal (BMO) established its auto loan ABS program, Canadian Pacer Auto Receivables Trust (CPART), and has since issued two U.S. cross-border transactions.

Through these transactions, S&P Global Ratings explained Scotiabank and BMO are essentially funding Canadian dollar-domiciled auto loan receivables by issuing U.S. dollar notes, which are swapped back into Canadian dollars.

Both programs have been well-received in the U.S. auto ABS market, according to S&P Global Ratings.

“They have offered the banks relatively cost-effective funding levels, which may encourage other Canadian banks with established auto loan lending programs to enter the market,” analysts said.

“Several Canadian auto captive finance companies have also issued auto ABS transactions in both the U.S. and Canadian markets in recent years,” analysts added.

From a U.S. investor’s perspective, in addition to issuer diversification, S&P Global Ratings indicated Scotiabank’s START series and BMO’s CPART series offer an increase in spread, with equal or better auto loan receivables relative to those backing similar auto ABS from U.S.-domiciled sponsors.

“In addition, the collateral pools for their issued transactions were generally comparable to those of established U.S. auto captives and non-captives,” analysts said.

“The report published today compares their transaction pools with those of U.S. auto captives and non-captives based on credit quality, vehicle type, average loan terms, geographic distribution and other characteristics,” analysts added.

With the auto finance market “stabilizing,” according to the latest analysis from TransUnion, what could additional U.S. influence mean to Canadian auto financing?

“In S&P Global Ratings' view, if Canadian auto lenders ensure performance volatility in their managed portfolios does not creep into their securitized portfolios, cross-border auto ABS should keep cruising right along,” analysts said.

“Only a rating committee may determine a rating action and this report does not constitute a rating action,” they went on to say.

Buyers pony up extra cash for used vehicles in April

MISSISSAUGA, Ontario - 

The Canadian buyers who did make a used-vehicle purchase in April evidently weren’t afraid of the price tag.

Despite a month that saw unpredictable weather across Canada keeping many used-vehicle buyers from showrooms, the top 10 funded used vehicles in Cox Automotive Canada’s Dealertrack Online Credit Application Network continued to see annual average cash price gains in April.

With eight of the Top 10 funded used vehicles recording gains, that average cash prices rose 3.4 percent last month, compared to April 2017. Compared to the previous month, the April 2018 average dropped slightly — down 0.3 percent.

The Dodge Grand Caravan was the model among the top 10 funded used vehicles with the most significant annual (9.7 percent) and monthly (2.1 percent) average cash price increases, rising from $20,476 to $20,912 in April.

The vehicle with the largest year-to-year and month-to-month average cash price drop was the Dodge Journey. The compact SUV saw year-over-year and month-over-month reductions of 1.9 percent and 2.3 percent, respectively, dropping from $19,483 to $19,027 in April.

Regarding the volume of used vehicles funded in the Dealertrack Network, the Toyota Corolla jumped two spots in April, from ninth place to seventh.

“As we all experienced, the weather this spring in Canada has been cooler than normal, which may have kept used car buyers at home,” said Richard Evans, vice president and general manager of Dealertrack Canada.

FICO uncovers 7 trends about Canadians and auto financing

TORONTO - 

The latest research endeavor by Silicon Valley analytic software firm FICO showed a vast majority of Canadian consumers is much more likely to have confirmation the vehicle they found online has four-wheel drive before they have the financing available to make the purchase.

On Thursday, FICO announced the findings of its first global survey on consumer perceptions of the automotive finance process. The research looked at how consumers view the financing aspect of their purchase for new and used vehicles, as well as how the ecosystem of providers (banks, captive finance providers, credit unions, dealerships and startups) are currently meeting customer expectations.

Three primary findings from the Canadian portion of the project included:

• Nearly 8 in 10 (78 percent) of Canadian consumers shopped for a vehicle first, before inquiring about financing.

• Seventy percent of Canadian consumers obtain their financing at the dealership and are among the least likely to seek financing online (4 percent).

• Canadians are the most likely consumers globally, to only consider one financial offer before making their decision (60 percent).

“FICO’s research provides valuable insight into the auto finance experience for consumers. As a customer-centric organization, GM Financial puts our customers at the center of everything we do. The results of the research are a great validation that lenders and their dealers must be relationship-focused throughout the customer journey,” said Bob Beatty, executive vice president for North America customer experience at GM Financial.

Among the key findings, FICO noticed a sizable gap between a consumer’s interest in online auto financing (33 percent) versus current global market adoption (10 percent).

In Canada, FICO indicated there is a 19-point difference, as only 4 percent of Canadian consumers applied for their auto financing online, while 23 percent plan to do so for their next contract.

Also, throughout the provinces, the dealership is still the main channel for consumers with 70 percent financing their vehicle purchase at the dealership.

FICO pointed out that Canadian consumers appreciate immediacy in their financing process. The survey showed that 35 percent of Canadian respondents would accept or at least consider an instant offer for financing a vehicle if that meant they could avoid dealing with a bank or doing extra paperwork.

Further, the project highlighted that Canadian respondents (60 percent, to be exact) were the most likely to report only considering one financing offer in their auto-financing process, compared to the global average of 44.4 percent.

“Canadian consumers want to speed up and streamline the auto-lending process,” said Kevin Deveau, vice president and managing director of FICO Canada.

“This haste could mean that there is a lack of understanding of available options which ultimately may result in Canadians taking financing offers that aren’t right for them,” Deveau said. “Lenders have an opportunity to be proactive, to educate their customers, and to humanize the experience.”

FICO shared four other data points of note for Canada, including:

• A good offer can sway consumers since the research showed 32 percent of Canadians didn’t initiate the auto-financing process; rather, a company had reached out to them with an offer.

• There are generational differences in auto financing. FICO noticed Baby boomers strongly prefer going to a dealership and millennials prefer going to a bank. In general, younger consumers are more likely to seek digital financing, however, is not the first choice for the majority of any age group.

• Obtaining auto financing is perceived as simple. Canadian respondents were the most likely globally to rate their auto-finance process as easy.

• Overall, consumers are fairly satisfied with their experience. FICO reported that 89 percent of Canadian respondents feel they got a good or excellent deal. Further, the clear majority of consumers around the world feel that they are receiving at least a fair deal in during their financing experience.

FICO’s independent research surveyed 2,200 adult consumers across nine countries including Canada, the United States, Mexico, Chile, Australia, New Zealand, Germany, Spain and the United Kingdom. The respondents were between the ages of 18 and 64 and had acquired financing for a new or used vehicle within the last three years.

More information on the survey results .

 

COMMENTARY: How car dealerships can dominate the subprime market

VANCOUVER  - 

According to , the average Canadian household spends an average of $11,000 annually on private transportation. Vehicles are typically the second most expensive asset owned, after a home, and buying a vehicle is a significant event in a person’s life.

Through the car-buying process, Canadians want trust, reliability and an agreement that they’re comfortable with.

When a consumer walks into a dealership, the first person they talk to about their financial situation is a member of the dealership team.

But if the customer falls under subprime and staff aren’t trained to help someone with less-than-perfect credit, it could be a lost lead. reports more Canadians are interested in buying used cars as opposed to new cars.

For dealerships in Canada, this stat is important when mapping out how a dealership business should operate.

Subprime consumers are starting to take up a large percentage of the automotive market, and auto loan lenders can help consumers with less-than-perfect credit apply for financing within a subprime budget.

Credit-challenged customers in Canada impact car dealership buying trends, so it’s best to be ready for these leads when they walk through a dealership’s doors.

It’s important for car dealerships across the country to ensure that Canadians facing all types of credit situations have access to a fair auto finance market – one that helps both subprime and prime customers.

Building a subprime infrastructure, developing strong relations with subprime lenders and training a dealership sales team for subprime customers will open doors to a massive market.

Sonny Dhanoya is an account manager at Canada Drives.

Axis Auto Finance finalizes acquisition of Trend Financial

TORONTO - 

To borrow a phrase from vehicle delivery vernacular, the acquisition of Trend Financial by Axis Auto Finance “rolled over the curb” this week.

According to a news release, Axis said its acquisition of all of the issued and outstanding securities of Trend closed on Monday.

“The closing of the Trend acquisition creates a powerhouse in the Canadian subprime auto lending market,” said Ilja Troitschanski, Axis’ founder and president. “We are excited to welcome the Trend team to Axis and look forward to our future together.”

The acquisition was completed pursuant to a share purchase agreement dated March 6 for a total consideration of approximately $29.3 million, comprised of:

— Approximately $20.7 million in cash, inclusive of a $1 million holdback amount paid into escrow and releasable following the completion of the purchase price adjustments under the share purchase agreement.

— The issuance of 3,252,244 common shares in the capital of Axis and 1,918,194 common share purchase warrants.

— The issuance of 2,015,409 common shares and 2,562,933 warrants, paid into escrow and, subject to certain exceptions, releasable no later than the date that is 19 months from the closing date of the acquisition

— The issuance of a contingent 1,684,345 Common Shares and a contingent 2,141,929 Warrants, paid into escrow and payable in accordance with the terms of the Share Purchase Agreement. Each Common Share was issued at a deemed price of $0.70 per Common Share and each Warrant entitles the holder thereof to purchase a Common Share at a price of $0.90 at any time during a period of 36 months following the closing date of the Acquisition.

In addition, as previously disclosed, Axis reiterated that it issued an additional $3 million principal aggregate amount of extendible convertible unsecured subordinated debentures to certain vendors of Trend, who subscribed for such debentures with a portion of the cash entitled to be received by such vendors pursuant to the acquisition.

The company indicated the Debentures are not listed or posted for trading on any exchange and are subject to a statutory four-month and a day hold.

Axis also explained the acquisition was funded in part by a private placement financing of subscription receipts and debentures, which closed on March 22, through a syndicate of underwriters co-led by Canaccord Genuity Corp. and INFOR Financial Inc. and including PI Financial Corp. and Raymond James Ltd.

Pursuant to the offering, Axis issued 10,440,784 subscription receipts at a price of $0.70 per subscription receipt for gross proceeds of approximately $7.3 million and $14.55 million aggregate principal amount of debentures.

In accordance with the terms of the subscription receipts, each subscription receipt was exchanged upon the closing of the acquisition for one common share and the proceeds from the sale of the subscription receipts were released from escrow. Holders of subscription receipts are not required to take any action in order to receive their common shares, according to the company.

INFOR Financial acted as financial adviser to Axis in connection with the acquisition and Dentons Canada acted as legal counsel to Axis.

In connection with the closing of the acquisition, Axis said it will pay INFOR:

— A cash advisory fee in connection with Axis’ prior acquisition of Cars on Credit Financial

— An advisory fee in connection with the acquisition, satisfied in part by payment in cash and in part through the issuance of 321,428 Axis units at a price of $0.70 per unit.

Each unit is comprised of one common share and one half of a warrant, with each warrant entitling the holder thereof to purchase a common share at a price of $0.90 at any time during a period of 36 months following the closing date of the acquisition.

“I want to commend the Axis deal team, the management at Trend, as well as our advisers for successfully getting this transaction closed,” Axis chief executive officer Todd Hudson said. “We have become a clear leader in the Canadian subprime auto finance space and we intend to continue to grow Axis from coast to coast. The Trend deal puts us one step closer to that goal."

Further information on the company can be found at .

Sym-Tech announces partnership to deliver Audi, Volkswagen branded F&I services

TORONTO - 

Sym-Tech Dealer Services announced Tuesday a nationwide partnership with Audi Finance and Volkswagen Finance to deliver both the Audi After Care and Volkswagen Protection Plus branded suite of F&I products and services. The deal will be effective Nov. 1. 

Sym-Tech said that it has an experienced team of sales, technology, operations, dealer communications, claims and administration support to ensure a seamless transition for Audi and Volkswagen dealers in the fall.

"We're extremely pleased to be entering into this partnership with Audi Finance and Volkswagen Finance and supporting them in the evolution of Audi After Care and Volkswagen Protection Plus branded products," Sym-Tech chief executive officer Brad Wells said in a news release.

"In addition to a full suite of F&I products, we bring our industry proven F&I training, a dedicated in-store development team and our proprietary F&I technology solution, dave. We look forward to working with the Audi and Volkswagen Dealer network across Canada."

Axis to acquire Trend Financial

TORONTO - 

Axis Auto Finance has signed a share purchase agreement to buy subprime finance company Trend Financial, the company announced late Tuesday afternoon.

It’s a move that doubles the Axis portfolio — putting its net finance assets to roughly $110 million — and brings its “largest director competitor” into the fold, says the company’s president.

Additionally, Axis named Todd Hudson as its chief executive officer, a move that is effective March 15 and splits the president/CEO role at the finance company.

Hudson comes to Axis from ECN Capital, where he was chief operating officer.

Axis founder Ilja Troitschanski remains president.

Details on purchase

The deal would be worth approximately $29.3 million. 

The purchase would be funded through a private placement offering of approximately $6.5 million in subscription receipts and $17.4 million in extendible convertible debentures.

The purchase price would include approximately $23.9 million in cash and the issuance 6.95 million common shares and 6.6 million common share purchase warrants.

“This is a transformational event in the development of Axis. Not only are we doubling our portfolio, but we are also acquiring our largest direct competitor,” Troitschanski said in a news release.

“Together with the recently completed acquisition of Cars on Credit, Axis has firmly established itself as a dominant force in the Canadian subprime automotive finance market,” he added. 

Hudson named CEO

In addition to his time with ECN, Hudson —  the new CEO — worked for Element Financial Corp., where he was executive vice president of originations, as well as Hathway Financial, where he was president and founder.

Hudson also worked for Newcourt and CIT Group prior to founding Hathway in 2003.

“I am excited to join the Axis team and feel that I can make meaningful contributions to the Company's development,” Hudson said.

 “Next to the substantial organic growth potential, there is a clearly identified opportunity for a growth-by-acquisition strategy in the Canadian non-prime finance market, something our team did very successfully at Element Financial and ECN Capital,” Hudson said.

Axis said in a news release that dividing the president and CEO posts affords the company “greater depth of management to continue its rapid organic growth and effectively evaluate and integrate potential acquisition targets.”

Troitschanski said: “We are delighted to welcome Mr. Hudson to our team. His decades of experience in alternative finance, specifically with respect to execution and integration of M&A transactions, will be a great boost to Axis’ acquisition and integration activities.”

 

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