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    One Of The Biggest Acquisitions Of 2020

    Edward D. - 2020-04-23T21:00:00.000Z

    Mergers and acquisitions are trendy buzzwords in the business world that deliver exceptional value when planned and executed properly.

    Continuing the hopeful trend in a major way, private equity firm FourShore Partners (FourShore) has recently acquired specialty finance company North State Acceptance (NSA). The deal was finalized in the beginning of March for an undisclosed sum.

    NSA is a North Carolina-based specialty finance company that provides auto loans and personal loans to consumers. The company is currently operating 12 branches across five states in the country’s Mid-Atlantic region.

    NSA works directly with independent auto dealerships as an indirect subprime auto lender. Indirect auto loans involve the primary borrower (the customer), the car dealership, and a third party (bank/loan provider). In this arrangement, the car dealership lends money to the customer. This very loan is later sold to the financial institution involved in the equation. This makes companies such as NSA the indirect owners of the car loan even though they didn’t directly issue the loan to the customer.  NSA also provides direct consumer loans at flexible terms and affordable rates.

    FourShore Partners is a Miami-based private equity firm which targets companies in lower and middle-market buyouts. Their main areas of interest include promising start-ups and ventures in the Caribbean and the US. The focus of the firm remains on the companies generating revenues between $2-10 million before any kind of tax and interest with an enterprise value between $10 million and $75 million. The company partners with organizations across a range of industries that demonstrate either good cash flow or distressing situations, despite a once steady and solid business. 

    While not much has been revealed about the specifics of the deal, the acquirers have exciting ideas for the future of the two brands together. As per the announcement, aligning with NSA seems to be an attractive opportunity in the auto financial cycle’ according to the FourShore Partners.

    It is interesting to note that this was also FourShore Partners’ first transaction in the financial services sector in the United States. Prior to this, FourShore had invested in the real estate sector aggressively over the past couple of years.

    With more brands venturing into new territories, it sure seems that the finance sector’s potential opportunities will continue to expand.

    A Look Ahead For Business Mergers & Acquisitions

    2018 was a good year for M&A transactions worldwide and expectations were for the deal-making frenzy to extend into 2019. However, the hype failed to live up to reality after a lackluster year of dealmaking. Generally, there has been noteworthy decline in M&A activities both in terms of volume and the deal figures.

    Fortunately, 2020 started with an active pace, giving more hope to dealmakers and companies on the hunt for potential acquisition opportunities. These days, there are many tailor-made business acquisition loans and financing options available to ease the process of purchasing a business or opening a franchise. 

    As we have seen from the first quarter of the year, businesses have already started scaling by engaging in deal-making. While many industries will consolidate due to extraordinary external conditions with a focus toward stimulating growth and improving margins, not all mergers and acquisitions meet their objectives.

    For those small businesses seeking to expand, business acquisition financing is considered amongst the simplest forms of funding available to enable one business to acquire another. With increased means of funding, we are seeing more acquisitions on a larger scale than ever before. While many people today consider buying a new company less risky and easier for potential growth then gaining the same through internal efforts, there are many risks associated with that strategy as well which cannot go understated.  

    Touted as one of the biggest acquisitions of the year, this deal has come at a time when businesses all over the globe are suffering from Coronavirus’s pandemic impact on the international economy.

    However, as countries across the globe continue to pull their resources together to fight the hazard, these ambitious takeover and combination moves provide the economy with a much-needed push to thrive once business conditions return to normal.