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NewDay set to swipe a deal with Deko: Sky News
Posted on Friday, 10 January 2020 13:36
NewDay is said to have signed off an agreement to acquire UK-based retail finance platform Deko, in a deal that could be worth as much as GBP 40.00 million, Sky News reported.
Following the possible transaction, the target would operate as a standalone business under its existing management team, insiders told the broadcaster.
The potential deal, Sky News noted, remains subject to regulatory approval and the valuation is dependent on Denko’s financial performance.
NewDay declined to comment on the broadcaster’s report.
Deko provides instalment credit and consumer loans through a panel of lenders.
Its platform checks multiple tiers of annual percentage rates to determine the appropriate one for customers and provides financial decisions in under 5 seconds, which is the fastest in the industry, according to its website.
Over the last ten years, Deko has processed more than 2.00 million credit applications and its software is used by over 1,700 merchants.
Citing sources, Sky News observed the potential deal is in line with NewDay’s strategy to diversify its business and not solely rely on traditional credit card revenues.
One insider stated the acquisition would provide a “collision point” between payments and credit for the company’s operations.
The transaction would also make NewDay a more attractive prospect on the market, should its shareholders, Cinven and CVC Capital Partners, decide to offload or list the business in the future, the broadcaster noted.
However, there has been no fixed date for a sale or flotation, Sky News cautioned.
Kent-based NewDay is a financial services company which provides credit card products to 5.00 million customers across the UK.
In the six months to 30th June 2019, the group posted adjusted earnings before interest, taxes, depreciation and amortisation of GBP 67.90 million, up 90.2 per cent from GBP 35.70 million in the corresponding period of 2018.
Within the same timeframe, NewDay generated consumer spending of GBP 2.70 billion (HY 2018: GBP 2.30 billion).
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