Credicorp has announced to its shareholders and the market that its indirectly held subsidiary Edyficar has reached an agreement with Grupo ACP Corp (“ACP”) to buy the shares they hold in Mibanco, the country’s largest micro-lending operation, which represent 60.68% of total shares.
Credicorp’s Executive Committee of the Board of Directors approved the transaction in its session of February 5th, 2014, and agreed to pay US$ 179,484,000.00 for the 60.68% stake, which represents a multiple of 1.3 times book value of Mibanco as of December 31st, 2013.
This agreement represents an important step to expand Edyficar’s micro-lending business, joining the efforts of the two most successful micro and PYME lending operations in the Peruvian market, which will provide ample access to credit with high standards of risk management to a growing sector of the population. As a result of this transaction, the new entity will become the largest micro lending entity in the country with a 19.5% share of the micro-lending and PYME market or 3.7% share of the total loan portfolio of the financial system, 886 thousand clients, S/. 9,343 million in assets and S/. 7,098 million in outstanding loans; and will hold a platform for future growth.
The acquisition is expected to be completed, subject to the necessary approvals, in the course of the next month. Subsequent to the acquisition of ACP’s share of Mibanco, and according to regulatory requirements, a public offer (OPA) will take place in order to tender the purchase offer to the minority shareholders of Mibanco.
This operation will create significant value for Edyficar’s shareholders, and consequently Credicorp’s shareholders, through important economies of scale, rationalization of organizational structures, savings through more appropriate funding structures, less client acquisition costs and broad efficiencies once the extensive synergies identified are effectively captured. The new micro-lending operation will be the strongest in the market, with the largest branch network almost exclusively dedicated to micro-lending and PYME, both being the fastest growing sectors, with the lowest level of penetration of the financial system, high levels of informality, but at the same time, highest rate of entrepreneurship and therefore, highest potential for future growth.
The closing of the acquisition is subject to compliance with certain conditions precedent and approvals, mainly the regulatory approval by the Peruvian Superintendency of Banks, Insurance and Pension Funds (SBS).
With this transaction, Credicorp reinforces its commitment to generate long-term shareholder value through the growth opportunities our market offers. Following this transaction, and true to the nature of its business, Edyficar will lead the development of the micro-lending and PYME businesses, which are considered the engine of future growth and development of the Peruvian economy for the future years.
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