INSIDE THE DEAL
‘Bringing IDS and WCG together will double the size of the organisation’
Recently, IDS announced its acquisition of White Clarke Group, a move which promises to create a secured finance IT powerhouse that will serve more than 300 banks, independents, OEM captives and speciality finance firms across North America, Europe and the Asia-Pacific. Alejandro Gonzalez caught up with IDS CEO David Hamilton to find out more.
US-based IDS is a provider of software-in-the-cloud with a reputation built on serving top-tier banks and independents who run asset finance, asset-based lending and factoring businesses and divisions within larger corporations.
To date, IDS’s “secured finance technology” clients for its software-as-a-service (SaaS) offering are spread across North America, UK-centred Europe and the Asia-Pacific (with offices in India and Australia).
According to industry observers, IDS (International Decision Systems) is known for “offering a premium product at a premium price point”, which means mid-tier or small-tier independent or captive lessors have not traditionally been its target customer, but speaking via video conference, David Hamilton, the company’s chief executive, tells me this picture has been evolving and the recent purchase of UK-based White Clarke Group (WCG), is a clear sign of the changes afoot at the company.
Hamilton, who joined IDS as CEO in February 2018, describes the company as “a product-centric services-enabled organisation”, which under his watch has been looking “to address the large available market of small and mid-players by packaging its application to make sure its service is accessible to that market space.”
Of IDS’s recent acquisition, Hamilton says: “With WCG, we’ve gained a wholesale finance solution for our North American client base, both on the automotive and the captive side,” adding that geographically, the purchase “gives us tremendous scale that we don’t have in Europe and it complements our Asia-Pacific business,” supporting the strong position that both IDS and WCG enjoy in Australia.
“Also, regarding adjacent markets, we gain from technology on the automotive side to help us grow through the retail fleet and wholesale market segments,” says Hamilton.
While IDS has significant market share in equipment and asset finance in North America (and Australia to a lesser extent), one of the attractions of the WCG acquisition, says Hamilton, is the company’s market share both in the automotive fleet and retail space in Europe. Meanwhile, WCG is a strong automotive leader in North America on the wholesale side, he adds.
“Bringing IDS and WCG together will produce a high performing, product-based, services-led organisation that will be an attractive proposition for our customers,” he says.
Hamilton, however, was not prepared to say much about the price of the deal, but he reveals that IDS’s and WCG’s yearly revenues are on par. “When WCG and IDS are brought together the size of the organisation doubles,” he says.
IDS has acquired WCG from Five Arrows Principal Investments (the European private equity arm of Rothschild & Co’s Merchant Banking), who originally invested in the business in 2016 and will remain a shareholder in the combined company.
WCG currently employs around 600 finance and technology professionals across its offices globally, according to a statement.
“WCG has more staff than we do on the services side, so we’ll be looking to capitalise on that rich talent pool of services capability they have in Europe,” says Hamilton.
The Australian-born CEO is also excited about the “impressive” metrics behind the acquisition.
Together the companies will service more than $350bn of equipment finance in net asset values, $50bn in US factoring and eight of the top 10 global automotive manufactures, which represent 34 automotive brands in the world.
In the UK, WCG services six of the top 10 fleet financing firms and four of the top 10 large equipment finance firms, and has software deployed out through 20,000 automotive dealerships globally.
“WCG has built a strong services capability in Europe and the Asia Pacific that delivers highly tailored solutions to its client base through a strategic and configurable architecture, which is something we’re looking to capitalise on,” says Hamilton.
Alejandro Gonzalez is editor of Leasing Life