TORONTO and REGINA,
Sept. 16, 2019 /CNW/ - Accord
Financial Corp. (TSX – ACD) ("Accord") and Concentra Bank
("Concentra") are pleased to announce the formation of a strategic
alliance and a $5 million private
placement of convertible unsecured subordinated debentures. The
strategic alliance, expected to be formalized by September 30, will allow both parties to deliver
a broader range of banking and financing solutions to their
clients, clearly enhancing the value they deliver in their
respective markets. Accord and Concentra will also consider
developing new products together as opportunities arise.
Highlights
- With more than $35 billion of
total assets under administration, Concentra is the leading
provider of wholesale banking and trust solutions to credit unions
across Canada
- Accord is one of North
America's leading independent commercial finance companies,
serving a broad base of the country's most dynamic industries since
1978
- The alliance will capitalize on significant cross-referral
opportunities, giving each organization access to new markets and
enhancing their value proposition within existing markets
- Concentra's investment in Accord will boost its capital base,
paving the way for continued growth
Accord's asset-based lending, factoring and equipment finance
solutions have been embraced by small and medium-sized businesses
throughout Canada and the United States. Through this strategic
alliance, Concentra will offer Accord's suite of innovative
solutions through its network of 200+ credit unions, serving 5.5
million customers, of which approximately 10% are commercial
clients. "This alliance is an outstanding opportunity for us to
reach a broad cross-section of the Canadian economy, especially in
areas and industries under-served by the traditional banks," said
Simon Hitzig, Accord's President
& CEO. "We look forward to enhancing the business relationships
each organization already has, and creating new ones together."
Concentra, as a Schedule I chartered bank, offers a
comprehensive suite of banking products, including deposits, cash
management, senior bank debt, and trust services. Accord plans to
offer these same products to its coast-to-coast network of business
clients who would benefit extensively from these solutions. "This
alliance enhances the solution set we can deliver through the
credit union system and gives us access to a new channel to deliver
our unique banking solutions," said Concentra President & CEO
Don Coulter. "Both organizations
bring an entrepreneurial spirit to serving Canada's business community, an approach that
naturally puts us on the same page as our clients."
In connection to this strategic partnership, Concentra has
invested $5 million in unlisted
Series B convertible unsecured subordinated debentures (the
"Debentures") via private placement. The Debentures have an
interest rate of 7.00%, will mature on December 31, 2023 (the "Maturity Date") and
interest will be payable semi-annually in arrears on June 30 and December
31 of each year, commencing December
31, 2019. At Concentra's option, the Debentures may be
converted into common shares of Accord ("Common Shares") at any
time prior to the close of business on the earliest of (i) the
business day immediately preceding the Maturity Date; (ii) if
called for redemption, on the business day immediately preceding
the date specified by Accord for redemption of the Debentures; or
(iii) if Accord is required to offer to purchase such Debentures
pursuant to a change of control purchase offer, on the business day
immediately preceding the payment date. The initial conversion
price will be $13.50 per Common
Share, and will be subject to adjustment in certain
circumstances.
Accord will use the net proceeds of the private placement of
Debentures to repay a portion of its bank indebtedness and for
general and working capital purposes.
INFOR Financial Inc. acted as the exclusive financial advisor to
Accord in connection with the establishment of the strategic
partnership and the private placement.
About Accord Financial Corp.
Accord Financial Corp., founded in 1978, is one of North America's leading independent finance
companies. Serving clients throughout the
United States and Canada,
Accord's flexible finance programs cover the full spectrum of
asset-based lending, including: factoring, inventory finance,
equipment finance, trade finance and film/media finance. For 41
years, Accord has simplified access to capital, helping businesses
seize opportunity and drive success.
About Concentra Bank
As Canada's leading provider of
wholesale banking and trust solutions to credit unions, Concentra
partners with its clients and fintechs to offer Canadians
commercial lending, mortgages, securitization, foreign exchange,
cash and treasury management, and leasing solutions. Wealth
management offerings from Concentra Trust focus on registered
plans, personal and corporate trust services, and estate planning
and administration. In 2018 Concentra adopted a new business model
and strategy, and in 10 years, it aspires to be Canada's leading mid-market commercial bank,
while continuing to support the credit union system. Concentra's
purpose, "Creating the future of banking, to enable your
success," commits the bank to improving its organization,
communities and industry and to being a bold leader in banking,
creating solutions with customers' needs in mind. As of
March 31, 2019, Concentra managed
total loan assets of more than $8.1
billion.
Forward-Looking Statements
This press release includes forward-looking statements about
Accord and Concentra. In certain cases, forward-looking statements
are statements that are predictive in nature, depend upon or refer
to future events or conditions, and/or can be identified by the use
of words such as 'expects', 'anticipates', 'intends', 'plans',
'believes', 'budgeted', 'estimates', 'forecasts', 'targets' or
negative versions thereof and similar expressions, and/or state
that certain actions, events or results 'may', 'could', 'would',
'might' or 'will' be taken, occur or be achieved.
Forward-looking statements are based on certain factors and
assumptions and are inherently subject to, among other things,
risks, uncertainties and assumptions about Accord's and Concentra's
operations, economic factors and the industry generally, as well as
those factors referred to in the "Risks and Uncertainties That
Could Affect Future Results" section on pages 27 to 30 of Accord's
annual report for the year ended December
31, 2018, which is incorporated by reference into its Annual
Information Form dated March 22,
2019, and "Caution Regarding Forward-Looking Statements" on
page 1 of Concentra's 2018 Management's Discussion and
Analysis.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those expressed or implied by
forward-looking statements made by Accord and Concentra. The reader
is cautioned to consider these and other factors carefully and not
place undue reliance on forward-looking statements, which may not
be appropriate for other purposes. Accord and Concentra are under
no obligation (and expressly disclaim any such obligation) to
update or alter the forward-looking statements whether as a result
of new information, future events or otherwise, unless required by
law.
SOURCE Accord Financial Corp.