Latitude Group is claiming bragging rights as the number one non-bank consumer lender in Australia and New Zealand, following its acquisition of hummgroup’s consumer finance business.

Latitude and humm announced on Friday that they have entered into a binding, definitive agreement for the sale of humm’s consumer finance business to Latitude for A$335 million, subject to shareholder and regulatory approvals.

Consideration will be in the form of 150 million Latitude shares and $35 million cash. humm said it plans to distribute the entire proceeds to shareholders.

humm chair Christine Christian said the price values the business at 13.4 times cash profit, which “represents compelling value for shareholders”.

humm retains its commercial business, flexicommercial, whose main business is asset finance. 

The company’s commercial and leasing division accounted for $96.8 million of humm’s total income of $443.9 million in 2020/21 and $22.1 million of total net profit of $60.1 million.

humm said the commercial business has good growth potential. It expects to report cash profit of $15.3 million for the commercial and leasing division for the December half.

Latitude has acquired a cards and BNPL business that has 2.6 million customers, 60,000 merchants and $1.9 billion of receivables.

Latitude said it has 2.8 million customers, 5500 merchants and $6.5 billion of receivables.

Latitude said the two businesses have complementary technology and product strategies. It said it will generate $65 million of cost synergies from the deal.

It expects humm’s consumer business to generate $35 million of pre-tac cash earnings in 2022/23. With synergies, the expected pre-tax cash earnings contribution will be $55 million in 2022/23.

Latitude reported net profit of $89.5 million on operating income of $420.9 million for the six months to June 2021.