Morses Club acquires current account provider U Holdings

Doorstep lender Morses Club acquired digital current account provider U Holdings on Monday for up to £10.8m.

Morses snapped up U for an initial cash consideration of £5.8m, financed from its existing cash and debt facilities, and a deferred consideration of up to £5m - payable in cash over the next four years and conditional upon certain net profit criteria having been met.

The AIM-traded company said the acquisition of U was "an important step" in its strategy of building a digital offering to allow its customers to access credit flexibly in a "significant growth segment" of the market.

As a result of the transaction, Morses also acquired U Account's technology and e-money banking platform, along with its 20,000 current active customers.

Chief executive Paul Smith said: "This acquisition represents a fantastic opportunity to enter the rapidly growing online banking market.

"This is another exciting step for Morses Club as, consistent with our stated strategy, we continue to diversify our product offering to serve a broader range of customers across the non-standard credit space."

As of 0900 BST, Morses shares had dipped 2.58% to 151p.