Cardiff International, Inc. (OTCQB: CDIF) and American Cycle Finance today announced they have signed a definitive merger agreement under which American Cycle will merge into Cardiff International as its subsidiary, American Cycle Finance, Inc., in an all-stock transaction valued at approximately $5 million.
Cardiff's total assets will increase to $13 million including the $5 million in acquired American Cycle assets. This market expanding merger provides entry into attractive markets with strong demographics and includes 204 dealers throughout America. In 2016 American Cycle reported $6.5 million in original loans; a loan portfolio of $7 million in assets; losses of less than 1.6%; revenue of $1.3 million.
"We are pleased to welcome American Cycle to the Cardiff family of companies," said Alex Cunningham, President/Chief Executive Officer of Cardiff. "This partnership builds on Cardiff's commitment to create a strong platform for our investors, while diversifying our revenues streams, improving profitability and increasing shareholder value. American Cycle founders and senior management believes it's in their best interest to become part of Cardiff which provides them the financial platform to double their business over the next 12 months projecting their 2017 portfolio close to $12 million. We have a strong track record of execution and our collective teams are positioned to complete this integration flawlessly."
American Cycle (formally, "Ride Today Acceptance, LLC" was founded in January, 2015, in Beverly, Massachusetts.
Benjamin Donnarumma, manager, commented, "We are pleased to announce this combination with Cardiff and believe our business and employees will benefit greatly from this transaction. It's complementary to our strategic initiatives, a solid fit, and a well executed deal with meaningful financial growth."
American Cycle capitalizes on a unique and profitable financing opportunity in the U.S. sub-prime motorcycle financing market. American Cycle has spent the last two years building a financial infrastructure and expanding its dealer footprint. As of January 1st, 2017, American Cycle has 204 dealers nationwide.
Unlike the subprime auto industry, American Cycle provides customers two major advantages over a subprime auto loan: 1.) favorable payment terms; 2.) assets with a slower depreciation rate.
The U.S. new motorcycle sales averages approximately $350MM annually, while used motorcycle sales exceed $1.3B annually. American Cycle was recognized by Power Sports Finance in December as one of the top 10 sub-prime lenders in 2016.
In August 2016, American Cycle entered into an agent agreement with RPMOne, a leader in sales of Powersports after-market products currently in 800 dealerships nationwide.
Leadership
After the transaction is completed, the founders have executed retention agreements and will remain with American Cycle as a subsidiary of Cardiff in continuing their leadership roles.
