TruFin (AIM:TRU) on Wednesday announced that its subsidiary Oxygen Finance Group has acquired the entire issued share capital of Rockford Associates for £1.8m in cash, with a further £0.2m payable if Rockford hits agreed fourth-quarter earnings (EBITDA) targets.
The deal marks the first bolt-on acquisition under TruFin's post-disposal roll-up strategy, which targets one new platform acquisition a year plus at least one bolt-on for each existing platform, built around businesses with EBITDA margins above 40% and internal rates of return above 20%.
TruFin holds an approximately 85% stake in Oxygen Finance, one of two platform businesses, alongside Satago Financial Solutions, that form the foundation of that strategy following the completion of the Playstack disposal in June.
Rockford, founded in 2002, provides overpayment audits that identify and recover sums paid in error, including duplicate payments, VAT errors, unclaimed statement credits and fraudulent payments, and has more than 60 active clients across housing, healthcare, education, local government and the private sector, with returning clients generating more than 80% of revenue.
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Oxygen previously offered this service to its early payment clients through a third-party provider; Rockford will now deliver overpayment audits to both its own client base and Oxygen's existing customers in-house.
The consideration, net of cash acquired, was funded from the group's existing cash resources and is expected to be earnings accretive from its first full year of ownership.
"Their experience and established client relationships complement our own and create opportunities to grow our overpayment audit business," said Vicki Sloane, chief executive of Oxygen.