COG and CML to merge 14 November 2019 5:01PM John Kavanagh Business lending, Equity capital markets, M&A Business finance broker Consolidated Operations Group is furthering its strategy of adding in-house finance products to complement its distribution capability, with the announcement of a merger with SME finance company CML Group.The companies have entered into a scheme implementation agreement. CML shareholders will have the option of taking COG shares or a mix of cash and COG shares.The offer values CML at A$111.4 million. In addition to the scheme consideration, CML will pay a dividend immediately prior to the scheme implementation.COG claims to be the country's biggest equipment finance broker, with a 17 per cent share. It also offers car finance, operating leasing, premium funding, invoice discounting and insurance broking.It has a network of 117 employed brokers and 4988 brokers using its aggregation service.It has a $97 million receivables book, made up predominantly of equipment leases.CML offers invoice finance, equipment finance and trade finance. Earlier this month, it announced the acquisition of Classic Funding Group, giving it a significant increase in funding capacity.It currently has $125 million of equipment finance advances and is turning over $500 million in invoice discounting and $1.5 billion in invoice factoring.Both companies are going to the market to raise equity: $20.2 million in COG's case and $14.5 million for CML. Proceeds will be used to pay costs of the merger, reduce debt and provide working capital.The merged company will eventually be re-named.Based on 2018/19 financials, the merged business has revenue of $264.9 million, EBITDA of $50.3 million and net profit of $17.4 million (COG contributing $7.9 million of NPAT and CML $9.5 million).COG chief executive Andrew Bennett will be the CEO of the merged group. CML Group CEO Daniel Riley will take on a new role as executive director.The CML merger is the latest in a long list of acquisitions COG has made in recent years. Since 2015 it has acquired Platform, a finance broker; 50 per cent of Linx, an equipment finance, insurance and mortgage broker; 80 per cent of Consolidated Finance Group, a finance aggregator; and 32 per cent of Westlawn, a finance company.