- Loan provider, Goeasy Limited (TSX:GSY) has acquired a consumer loan portfolio from Mogo Inc. (TSX:MOGO)
- The portfolio has receivables of roughly C$31.9 million and around 5,700 active customers
- The transaction will also include a three-year lending partnership with Mogo
- Mogo will receive compensation for loans funded by goeasy, as well as volume-based incentive payments
- Goeasy Limited (GSY) is down 3.05 per cent, with shares currently trading for $62.91 and a market cap of $902.56 million
Goeasy Limited (TSX:GSY) is acquiring a consumer loan portfolio from Mogo Inc (TSX:MOGO) for C$31.9 million.
Based in Mississauga, goeasy provides leasing and lending services through its operating divisions, easyhome and easyfinancial.
The newly acquired portfolio consists of personal installment loans with terms of up to five years. Its gross receivables balance of $31.9 million comes from roughly 5,700 active customers.
Prior to the transaction, which will close on February 28, goeasy said that a considerable amount of due diligence was undertaken.
The transaction will also include approximately $12.4 million of previously written-off consumer loans. Mogo will also promote easyfinancial to its current and prospective members.
Jason Mullins, goeasy’s President and CEO, said that it was an exciting time to be partnering with one of Canada’s leading fintech platforms.
“The acquisition of this consumer loan portfolio, which resembles our core unsecured loan product with risk-based pricing, will help accelerate our growth and provide positive benefit to our 2020 earnings,” he said.
In addition to the portfolio acquisition, goeasy will establish a three-year lending partnership with Mogo. The arrangement comes after a five-month pilot that began in October 2019.
Under the terms of the agreement, goeasy will become Mogo’s exclusive provider of all non-prime consumer loans.
Mullins added that the lending partnership falls within goeasy’s strategy of expanding through third party arrangements.
In order to facilitate the transaction, the two companies have merged their technology platforms. It’s hoped that an integrated service will provide a seamless customer experience, and enable goeasy to approve and fund loans more easily.
“As we transition Mogo’s loan portfolio to easyfinancial, we look forward to building strong relationships with these customers and to offer them our full suite of financial products and services,” Mullins concluded.
Mogo will receive compensation for loans funded by goeasy, as well as volume-based incentive payments.
Goeasy Limited (GSY) is down 3.05 per cent, with shares trading for $62.91 at 12:04pm EST.