Malcom Finance Expands Horizons: Eyeing Acquisitions for International Growth

Malcom Finance, a Czech-based financial services provider catering to the logistics industry, is actively exploring acquisition opportunities as part of its ambitious international expansion strategy. The company's CEO, Jaroslav Ton, has revealed the company's plans to Mergermarket, highlighting its focus on expanding into new markets, particularly the DACH region (Germany, Austria, and Switzerland).

Unlocking Synergies and Scaling Up in the Logistics Sector

Acquisition Targets and Funding Strategies

Malcom Finance is considering acquisitions as a key component of its growth strategy, with a focus on targets valued at under €20 million. The company is open to appointing advisors to assist with potential acquisitions, but Ton emphasizes that they are waiting to identify suitable targets before engaging any advisors. The fintech firm is also actively seeking out sell-side advisors, private equity (PE), and venture capital (VC) firms that may have relevant clients or portfolio companies they wish to discuss.Funding for these acquisitions could come from a combination of additional debt and equity. Malcom Finance currently utilizes private credit funds, asset managers, and partnership banks to fund its debt requirements. In 2022, the company raised €18 million through a mix of equity and debt from investors, including Atmos Ventures, Tera Ventures, Lighthouse Ventures, Advance Global Capital, and private angel investors. Equity backers now control around 22% of the company.

Synergies and Value Proposition

Ton believes that acquiring companies in Western markets could enable Malcom Finance to realize significant synergies on a larger scale, particularly if the target has a factoring license in a licensed market. Such companies would have a strong presence in the logistics sector, allowing Malcom Finance to leverage its expertise and find additional synergies.The company's value proposition for corporate clients in the logistics industry centers around its technology stack, which can drive efficiencies in back-office financial processes, such as payments and accounting, as well as procurement. Ton sees this as a key differentiator that can benefit larger logistics players, including some of the top 10 companies in the world, which Malcom Finance now serves.

Expansion into New Markets

Malcom Finance's international expansion plans are not limited to the DACH region. The company currently operates across Central and Eastern Europe (CEE) and Southern Europe, and Ton sees significant potential in the broader European market, with over 550,000 trucking companies across the EU.The company's CEO has recently returned from Germany as part of the scouting process, but has yet to identify a suitable acquisition target. Malcom Finance is actively seeking out potential candidates in the DACH region and is open to hearing from sell-side advisors or PE/VC firms with relevant clients or portfolio companies.

Rapid Growth and Evolving Business Model

Malcom Finance has experienced triple-digit year-on-year growth and expects its annualized revenues to remain in the upper single-digit million bracket this year. The company's business model has evolved over time, shifting from providing factoring financing services to small and medium-sized trucking companies to now serving larger corporate clients in the logistics sector.This shift has allowed Malcom Finance to "move up the value chain" and work with some of the largest logistics companies in the world. Ton believes this corporate offering positions the company well to capitalize on the growth opportunities in the logistics industry.

Sector Trends and Competitive Landscape

The logistics sector has seen significant M&A activity in recent years, with notable deals such as the acquisitions of C.H. Robinson Worldwide's European business by German logistics giant sennder, and DSV's acquisition of DB Schenker for €14.3 billion. These developments underscore the dynamic nature of the industry and the potential for further consolidation.As Malcom Finance continues to expand its reach and capabilities, it will need to navigate a competitive landscape that includes both established players and emerging fintech disruptors. The company's ability to leverage its technology, expertise, and strategic partnerships will be crucial in driving its growth and securing a strong position in the market.