Online financial services company Heartland Group is expanding in Australia with the purchase of a rural finance company.
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It will pay $A143 million ($NZ154m) for StockCo Holdings 2, currently owned by StockCo Australia Holdings and Elders Rural Service Australia, with a further $A11m based on future performance.
StockCo specialises in livestock finance for cattle and sheep farmers across Australia with total assets of $A341m, in a market worth more than $A7 billion. Elders has agreed to exclusively distribute the finance deals to its clients for the next five years.
"This acquisition will extend Heartland's 'best or only' strategy in Australia, by broadening Heartland's Australian offering in an area where it already has expertise," the company said in a statement.
It provides a similar type of livestock finance to farmers in New Zealand through its on-line Heartland Bank business.
Heartland's current Australian business is reverse mortgages, which allow older home owners to cash in on their property's value.
It said it would pay for the acquisition in the short term through new debt facilities from a large Australasian lender.
The transaction is expected to add about $A10m-$A12m to Heartland's annual net profit.
