RBS expands invoice finance activities

Royal Bank of Scotland has agreed to buy sales finance provider, Euro Sales Finance (ESF) in a transaction valuing the company at GBP68 million. The deal will enable the bank to expand its invoice finance business into Europe.

Euro Sales Finance was set up in 1995 and serves the European invoice finance market for small and medium-sized companies, converting unpaid invoices into finance and helping the companies take control of their cash flow, expand their business, finance organic growth or fund acquisitions. The firm operates from 16 offices, of which five are UK-based, six in France, four in Germany and one in the Netherlands.

Through its Royal Bank of Scotland Commercial Services division, the Royal Bank of Scotland has established a successful sales finance business in the UK. The acquisition of ESF will provide the bank with an immediate foothold in France, Germany and the Netherlands, as well as a springboard for further expansion in Europe. In the UK, ESF will benefit from the bank’s existing sales channels.

“The acquisition of ESF is a logical extension of our sales finance business and it fits well with our strategy of supporting the international activities of our UK-based clients and growing our corporate banking franchise in Europe,” said Iain Robertson, chief executive, corporate banking and financial markets.

The offer builds on the bank’s ongoing strategy focusing on tactical acquisitions in Europe and the US. In June, it announced the purchase of Allstate’s German and Italian insurance business via its Direct Line subsidiary, and in July it completed the buyout of Virgin One in the UK and the $2 billion cash offer for the retail banking operation of Mellon Bank in the US.