Senate inquiry, page-13

Money3 raises cash to buy PAID DAMON KITNEY VICTORIAN BUSINESS EDITOR1:24PM DECEMBER 8, 2014A DAY after the release of the Murray Inquiry recommended lower regulatory requirements for non-bank lenders to help them better compete against the big banks, the Alex Waislitz-backed listed payday lender Money3 is raising $20 million to purchase the assets of PAID International, an online provider of credit products.The Perth-based, privately owned Paid has a customer base of 26,000 active clients and offers short term loans online through key brand names such as Cash Train, First Stop Money, and Handy Cash.To fund the purchase Money3 will offer 13.8 million new shares at a price of $1.45 per ordinary share, a 4.6 per cent discount to the last close of $1.52 on Friday before Money3 shares were placed in a trading halt this morning.In addition PAID is expected to announce a Share Purchase Plan of $5 million.The placement is being managed by Wilson HTM.Money3 is a non-bank provider of secured and unsecured personal loans, providing financial products to people who would not otherwise be able to access credit from mainstream lenders.In a term sheet sent to potential investors today, the company says the PAID acquisition would provide Money3 with access to different customer segments (with an average wage of $57,000,25 per cent of whom are homeowners) and strong online capabilities.Since its listing in 2006 Money3 has purchased a number of businesses including Amazing Loans, Personal Finance Co, Summit Loans, Money Centre, AussieCash and The Cash Store.The Cash Store deal made Money3 the second-biggest operator in the sector behind lender and pawnshop operator Cash Converters.The acquisitions have all returned profits within the first 12 months of Money3 taking over management.“No other acquisition has offered such a strong database of working customers as PAIDor complementary systems and process improvements to M3,” the term sheet says.“This acquisition of PAID offers inexpensive customer acquisition ... Given our experience in the acquisition and integration of Cash Store, we believe the quality and opportunities PAID represents are an excellent acquisition for M3.”Money3 said the PAID transaction was “imminent because the PAID business is underfinancial distress”.Mr Waislitz’s listed Thorney Opportunities, an activist fund that aims to take large stakes in listed companies, is an investor in Money3. Mr Waislitz has 11 per cent of Money3 through shares and bonds.Thorney also has stakes in NBN contractor Service Stream, Austin Engineering and AMA Group, plus a significant cash position.