Morses Club, a home collected credit lender headquartered in West Yorkshire, has acquired Sheffield digital current account provider U Holdings.
The acquisition – for an initial cash consideration of £5.8 million – is part of the company’s steps of building a digital offering, enabling customers to access credit flexibility.
As well as the initial cash offering, the acquisition of U Holdings (trading as U Account) also includes debt facilities, and deferred consideration of up to £5 million, payable in cash over the next four years to February 2023.
U Account is a digital current account provider offering an alternative to traditional banking by providing a fully functional agency banking service.
As well as providing card services with its current accounts through contactless Mastercard debit cards, U Account also offers in-app features and functionality to help customers manage their finances more effectively.
As part of the transaction, Morses Club has acquired U Account’s technology and e-money banking platform, as well as its 20,000 current active customers.
Whilst U Account has historically been loss-making, management expect that post integration and restructuring, the losses incurred in the remainder of FY20 will be in the range of £1.4 million to £1.7 million.
“This acquisition represents a fantastic opportunity to enter the rapidly growing online banking market,” said Morses Club CEO Paul Smith.
“U Account features the full suite of digital banking services and has grown its customer base to c.20,000 active customers.
“U Account’s offering is highly complementary to that of Morses Club, and through this acquisition we expect to deliver significant synergies and cross selling opportunities.”