IVA arranger Debts.co.uk is paying £3m for Relax Finance.
Relax is a consumer loans and mortgages broker. Putting the two businesses together will provide a wider range of products to individuals. Demand for these services is increasing.
Debts.co.uk is paying £1.2m in cash, £1.5m in shares at 45p each and £300,000 in unsecured loan notes. Relax generated profits of £426,000 on turnover of £7.51m in the year to April 2008. Relax will provide more than two-fifths of group revenues.
The deal will add to the management team. Ian Guy will become chief operating officer of the enlarged group and Carl Kroger will be sales and marketing director. Both men were previously with Lloyds TSB and they founded Relax in 2005. Barry Krite, the current managing director of Debts.co.uk, will retire from the group.
Debts.co.uk is changing its name to Relax Group in order to reflect the wider range of financial services it will offer. The Debts.co.uk brand will be still be used for IVAs.
The shares were unchanged at 42p, valuing the company at £11.4m.
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