Dorchester Pacific adds Oxford Finance to its growing empire

Grant Baker, Dorchester's chairman
Dorchester Pacific 12-month price history (

Dorchester Pacific [NZX: DPC], the finance company that avoided failure in 2010 by convincing investors to accept a debt-for-equity swap, will acquire Levin-based lender Oxford Finance.

The Auckland-based firm expects to pay between $11.3 million to $12.3 million on acquiring the North Island car finance specialist, depending on Oxford's pre-tax operating earnings for the year ended March 31 2015, Dorchester Pacific said in a statement. It will fund the acquisition using retained earnings and proceeds from a 2013 capital raising.

Dorchester Pacific got a new lease of life in 2010 when Auckland private equity outfit, the Business Bakery, got involved with a recapitalisation plan in which some 7,200 investors owed about $84 million converted their debenture stock for four different types of security to keep the firm afloat while many other finance companies were failing in the wake of the global financial crisis and a local recession.

Acquired by Levin's electricity lines company Electra in 2003, Oxford had grown the value of its loan book to $50 million and will boost Dorchester Pacific's total loan book to a value of around $90 million.

Oxford has reach through Wellington, the Wairarapa, Taranaki, Hawkes Bay, Waikato and the Bay of Plenty, with 75 percent of its book tied up in motor vehicle financing and the remainder in consumer loans.

The acquisition is the latest in a series by Dorchester. Last year the company upped its holding in Turners Auctions to a cornerstone stake and in 2012 it bought Napier-based debt collection agency EC Credit for $18.5 million in cash, stock and earn outs.

Oxford Finance has "scale to boost group earnings quite significantly and there is a low integration risk," said Grant Baker, Dorchester's chairman. "We have acquired the business on a similar earnings multiple to our EC Credit acquisition and we are very comfortable with the value proposition."

It expects Oxford Finance will contribute $3 million to annual earnings, boosting forecast annual net profit to between $10 million to $11 million in 2015, and up to $15 million the following year. Last November the company gave annual guidance of $6 million trading profit for the period ending March 31.

Shares in the NZX listed company rose 2.1 percent to 24.5 cents, and have climbed 9.1 percent since Jan 1, although they have fallen 16 percent over the last 12 months, underperforming the NZX All Shares Index's gain of 9.6 percent.


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot


Sym Price Change
USD 0.6530 0.0000 0.00%
AUD 0.9072 0.0000 0.00%
EUR 0.6160 0.0000 0.00%
GBP 0.4339 0.0000 0.00%
HKD 5.0628 0.0000 0.00%
JPY 80.1490 0.0000 0.00%


Commodity Price Change Time
Gold Index 1056.2 -13.650 2015-11-27T00:
Oil Brent 45.2 -0.320 2015-11-27T00:
Oil Nymex 41.8 -1.230 2015-11-27T00:
Silver Index 14.0 -0.150 2015-11-27T00:


Symbol Open High Last %
NZX 50 6087.9 6103.4 6087.9 0.22%
NASDAQ 5121.9 5134.4 5116.1 0.22%
DAX 11277.9 11354.0 11320.8 -0.24%
DJI 17806.0 17830.4 17813.4 -0.08%
FTSE 6393.1 6393.1 6393.1 -0.28%
HKSE 22555.4 22555.4 22488.9 -1.87%
NI225 19994.0 19994.0 19944.4 -0.30%