North Mill Equipment Finance furthers expansion following acquisitions

North Mill Equipment Finance continues to expand with acquisitions to reach its goal of $5 billion in assets under management. 

North Mill Equipment Finance’s (NMEF) $502 million acquisition of Midland States Bancorp’s equipment finance portfolio, which closed last month, lifts its total gross receivables under management to nearly $3 billion, according to a Dec. 3 North Mill release.  

The transaction, serviced by Orion First, reflects strong institutional demand for NMEF-originated assets and caps a year in which the company also completed the acquisition of Pawnee Leasing. 

The acquisitions bear out NMEF’s strategy to maximize risk-adjusted returns by building scale and operating leverage, Chairman and Chief Executive David Lee told Equipment Finance News. 

“Given the scale of our operations and capital markets relationships, we’re able to pull off a transaction like Pawnee and [like] Midland with great efficiency and a lack of uncertainty for the seller.” — David Lee, chairman and chief executive, North Mill Equipment Finance

“To develop critical mass and scale, you need to have efficient funding mechanisms, so we’ve completed 10 securitizations in the last two years.” 

In addition to the securitizations, strong bank warehouse relationships and a well-capitalized equity partner in InterVest Capital enabled NMEF to complete its acquisitions, Lee said.  

Managing assets amid growth 

The Midland transaction also further expands NMEF’s partnership with Oaktree Capital Management, Lee said. Oaktree served as a funding partner in the transaction and will take most of the transaction onto its balance sheet as part of a simultaneous sale. 

Sharing the balance sheet risk with partners represents NMEF’s approach to achieving its strategic goal of $5 billion in assets under management, Lee said. 

“One thing that you should expect from us over the course of the next year or two will be additional partnerships with alternative investment funds and our private equity firms, whereby North Mill originates and services on behalf of those funds,” he said. “I would envision half of that [$5 billion] being on North Mill’s balance sheet and the other half being accounts that we manage on behalf of investment.” 

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