Pepper Group Limited has signed a share purchase agreement to acquire 100 per cent of Portuguese consumer finance business, Banco Primus SA (Lisbon) from parent company, Credit Foncier de France. In an investor presentation released via the ASX, Pepper said Primus "offers a unique and immediate opportunity to acquire a well-managed consumer credit bank in a highly profitable asset class and in an immediately adjacent market to our Spanish operations." Pepper observed that the acquisition expands its presence in the European market and provides a Portuguese banking license, with a branch in Spain, and the possibility to access other European banking markets over time, "all of which help with the longer-term funding options for our growing European lending business." Upon the successful completion of certain conditions, Pepper will pay €65 million in cash to CFF for 100 per cent of the Primus shares.  Pepper estimated that the purchase price equates to a price to book value multiple of 0.89 times, based on 31 Dec 2016 reported net assets for Primus. Pepper's management expects the transaction to be EPS accretive in the first full year of ownership from a deal that will be funded by a mixture of senior debt and equity.  Pepper said it had a number of alternatives by which it could fund the capital requirement of the transaction and had already secured the necessary senior debt funding commitments of €500m to fund Banco Primus' loan portfolios at close as well as to fund future originations. "Primus' banking license across multiple jurisdictions will allow us to raise deposits in Portugal, post obtaining the relevant approvals," Pepper stated. "Further, the possibility of activating the Spanish branch for deposit taking allows for further funding sources."  The transaction is subject to Bank of Portugal and European Central Bank approval and is expected to complete during Q1 2018. "We expect the regulatory process to take six to nine months," Pepper said in a note to investors. A break fee of €2.75 million is payable by Pepper "in standard applicable circumstances". In 2012, Primus refocused its core business toward the Portuguese car financing segment after having added auto loans to its asset base in 2008. A year earlier, Primus ceased origination of new mortgage loans in Spain and Portugal and stopped its car financing business in Hungary, and is currently managing these three businesses in run-off. Pepper said Primus operates in the "super prime space" of the Portuguese used auto loan market providing for an immediate opportunity for Pepper to exercise its underwriting capabilities to broaden the credit spectrum into the near-prime sector also as well as portfolio servicing for other loans. In the background is the reminder that Pepper, nonetheless, remains in exclusive discussions with KKR Credit Advisors in relation to "a potential control transaction" under which Pepper shareholders may receive $3.60 per share. There is no certainty that an agreement will be reached or that this proposal will be implemented.