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Malcom Finance looks to make acquisitions in DACH region and beyond – CEO
Malcom Finance (formerly 4Trans Factoring), a Czech headquartered company that offers financial products to logistics companies, is looking to make acquisitions as part of its international expansion plans, CEO Jaroslav Ton told Mergermarket.
The business is looking at multiple markets, with DACH being one of them, Ton said.
“Acquisitions are one of the alternatives we’re thinking about when we consider the go-to-market strategy in DACH and beyond,” he added.
Acquisitions would be under EUR 20m and Malcom Finance would ”definitely appoint an adviser” for the potential buys, Ton said. “It’s a bit of a chicken-and-egg situation, because we’d like to see more targets,” Ton said, adding that the company doesn’t want to engage any advisors before it sees any interesting targets.
The fintech would also like to hear from sell-side advisers or private equity (PE) or venture capital (VC) firms in case of relevant clients or portfolio companies that they want to talk about, Ton said. For example, a VC or PE firm may have a fintech company in its portfolio that it is looking to exit, he said.
An ideal target would benefit from Malcom Finance’s technology stack, Ton said. Efficiencies in the back office financial processes (payments, accounting) and procurement are part of its value proposition for corporates in logistics, he added.
“This is really something that has nicely shaped up over the last year or so, and this corporate offering allows us to gather up some of those very large players,” Ton said.
In earlier years, the business provided factoring financing services to small and medium-sized trucking companies, but more recently has branched into working with larger corporates and has “already moved up the value chain” in this respect. It now serves some very large logistics companies, including some of the top ten in the world, he said.
Entering a western market via a potential acquisition could enable it to realise synergies on a bigger scale, he added.
“Especially when it comes to companies that have a factoring license in licensed markets”, he said, pointing out that such companies have a meaningful exposure to logistics as in they have customers in that sector, “so that we can leverage our know-how and we can find synergies,” Ton said.
Prior to the interview with Mergermarket, Ton had just returned from Germany as part of the scouting process but as yet nothing suitable has been found. Malcom Finance would love to hear about suitable candidates in that region, he added.
Funding and exit timing
Acquisitions could be funded by raising extra debt and equity. At present, the company uses private credit funds and asset managers as well as its partnership banks to fund debt, Ton said.
In 2022, Malcolm Finance raised EUR 18m from Atmos Ventures, Tera Ventures, Lighthouse Ventures, Advance Global Capital and private angel investors through a combination of equity and debt in 2022, as previously reported. Equity backers control around 22%, Ton said.
The company continues to work with Advance Global Capital for financing, he added. The company is rapidly becoming an international player, said Ton, who is its majority shareholder. It is too early to discuss an exit, he said.
Malcolm Finance has seen triple-digit growth year-on-year and its annualized revenues will continue to be in the upper single-digit million bracket this year, Ton said.
In January, Ton spoke to Mergermarket about a potential EUR 10m in debt financing as well as a Series A raise. However, given the company’s rapid growth, this has not been required and Malcom Finance is now more interested in pursuing its current expansion strategy, he said in the latest interview.
The company currently operates across Central and Eastern Europe (CEE) and Southern Europe, and there are more than 550,000 trucking companies across the EU, Ton said.
There have been very interesting deals in the sector this year, like the big acquisitions by German giants sennder and DSV [CPH:DSV], he added. In July, sennder announced its acquisition of C.H. Robinson Worldwide‘s European haul business, as reported. DSV announced in September it would acquire DB Schenker for EUR 14.3bn.
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