Houlihan Lokey Advises Close Brothers Group

Houlihan Lokey is pleased to have advised on the sale of Close Brothers Retail Finance to Klarna Bank AB for an undisclosed amount. The transaction closed on January 1, 2019.

Close Brothers Group PLC (Close Brothers) announced the sale of Close Brothers Retail Finance (CBRF), which provides unsecured finance to consumers through retailers, to Swedish payment solutions group Klarna Bank AB (Klarna). Founded in 2014, CBRF has established itself as a highly regarded provider of multi-channel retail finance, with over 600 active merchants in the United Kingdom and a loan book of £66 million on 31 July 2018.

Klarna is one of Europe's leading payment providers and a licensed bank that wants to revolutionise the payment experience for shoppers and merchants alike. The acquisition will significantly strengthen Klarna's position in the UK market for retail financing and will enable accelerated growth and expansion of its consumer offering. Klarna is backed by investors such as Sequoia Capital, Bestseller, Permira, Visa, and Atomico.

The sale reflects Close Brothers' decision to exit the unsecured retail point of sale finance market after gradually and incrementally developing this business and assessing the market opportunity over several years. Close Brothers concluded that the business did not provide a long-term fit with its predominantly secured business model.

Houlihan Lokey served as the exclusive financial advisor to Close Brothers. This most recent transaction further strengthens Houlihan Lokey's leadership in the specialty finance universe and highlights continued momentum and leadership in the FIG sector, which includes specialists in finance, fintech, insurance, and asset and wealth management. Recent transactions include the sales of Titlestone Property Finance to Paragon Banking Group, BIK Brokers to Pollen Street Capital, and the acquisition of Small World Financial Services by Equistone.*

*The acquisition of Small World by Equistone was announced by Quayle Munro prior to its acquisition by Houlihan Lokey to establish the Data & Analytics Group.