Australian Finance Group (AFG) has announced it has entered a binding agreement to make a strategic investment in Think Tank Group Pty Ltd (Thinktank).
From the investment of 30.4% for $10.9million in cash consideration, AFG will begin distributing a white label Commercial Property product through its network of brokers.
Thinktank operates primarily as a small ticket commercial property lender and was established in 2005. It operates nationally and has a loan book in excess of $750m establishing itself as a viable and competitive non-major commercial property lender.
AFG Chief Executive Officer David Bailey explained the decision: “Our strategic investment in Thinktank represents the next evolutionary step for AFG to diversify its earnings base. The ongoing success of AFG Home Loans and the introduction of AFG Business are important contributors to the future growth of AFG. It makes sense to participate further in an asset class that we are comfortable with, both directly through the white label opportunity and indirectly through our shareholding to generate further earnings for AFG.
“The opportunity to blend Thinktank’s commercial property lending expertise with our own distribution and securitisation capability will benefit both businesses. It will also enable us to deliver further competition and choice to the small to medium enterprise (SME) market place at a time when it is most needed. AFG aims to bring the same disciplines to this white label proposition as we have successfully demonstrated with our own residential white label programme.”
Thinktank CEO, Jonathan Street, commented: “The agreement reached with AFG marks a further significant step forward for our business and serves to further enhance our capacity to best service the finance needs of borrowers over the breadth of the Australian commercial property market.
“In coming together, we see considerable opportunity to not only combine our efforts to great effect across the AFG network but equally in extending the same emerging advantages and benefits to our wider base of aggregation and broker relationships.”