Dealnet Provides Update on EcoHome Acquisition and Integration
Dealnet Provides Update on EcoHome Acquisition and Integration
– Momentum Public Relations – March 29, 2016
Dealnet Capital Corp. (DLS:tsxv), is pleased to provide an update to inform shareholders and the market on its recent activities including those related to the acquisition of EcoHome Financial (“EcoHome”) which was completed on February 18, 2016.
Integration and Growth of Consumer Finance Business
The Company is pleased to announce that the integration of EcoHome into Dealnet’s existing consumer finance business is progressing well. Our collective sales team is focused on growing originations in the HVAC and home improvement sector. The physical operations of EcoHome have now moved to the offices of Dealnet’s consumer finance business. The Company also continues to invest in innovative technology around its mobile lending platform to enhance the consumer and dealer experience.
Dealnet’s consolidated loan portfolio as of the end of February 2016 now stands at approximately $80 million and the Company continues to originate a significant volume of high quality leases and loans weekly.
Dealer Additions
The Company continues to attract high quality dealers and has dozens in various stages of on-boarding. Earlier in March, the Company signed a five-year exclusivity agreement with a large HVAC dealer in Ontario who is incented to originate in excess of $15 million per year over the term of the agreement. The Company is also in discussions with a number of strategic partners, including industry associations and equipment manufacturers that have the potential to drive significant originations of finance products. The Company expects to close additional large volume wins throughout 2016.
Underwriting Capacity
As part of the EcoHome acquisition, existing EcoHome facilities were migrated with the transaction providing EcoHome and Dealnet with an attractive cost of capital, reducing Dealnet’s overall cost of underwriting. The Company is currently in advanced discussions with a number of additional lenders and is negotiating underwriting capacity to support the expected growth in our consumer finance business. The Company expects to bring these additional facilities online over the coming months and will provide further updates in due course.
Filing of Business Acquisition Report
The Company also announces that it has filed its Business Acquisition Report related to the EcoHome acquisition which is available on SEDAR.
Forward Looking Statements
This news release contains certain “forward-looking information” within the meaning of applicable securities law including statements regarding the Company, integration of the EcoHome business, loan origination volumes and growth, strategic partnerships and underwriting capacity. Forward looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “would”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking information is based on the opinions, assumptions and estimates of management at the date the information is provided, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information including the risks relating to the challenges in integrating the business and product lines of Dealnet and EcoHome, general risks relating to the consumer finance industry and many other factors beyond the control of the Company. For a description of these and other risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s Management’s Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
For additional information please visit www.sedar.com.
- Published in Dealnet News, Financial Technology, News Home, Technology
DealNet closes acquisition of EcoHome Financial
Dealnet Closes the Acquisition of EcoHome Financial
– Momentum Public Relations – Feb.18
Dealnet Capital Corp. (“Dealnet” or the “Company”) (TSX VENTURE:DLS) today announced that it has closed the previously announced acquisition of EcoHome Financial Inc. (“EcoHome”), a premier non-bank lender in the Canadian heating, ventilation and air conditioning (HVAC) and home improvement segments, from Chesswood Group Limited (the “Acquisition”) for total consideration of approximately $35 million.
Pursuant to an amendment to the share purchase agreement dated February 17, 2016, the consideration paid for the Acquisition consisted of (i) $29 million in cash, (ii) 6,039,689 common shares of Dealnet having an aggregate value of $3.5 million; and (iii) a two-year unsecured convertible vendor take-back note in the principal amount of $2.5 million that bears interest at a rate of 6.0{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} per annum and is convertible by the holder into common shares of Dealnet at a conversion price of $0.64 per share.
In connection with the Acquisition, the Company previously issued 54,545,700 subscription receipts (the “Subscription Receipts”) at a price of $0.55 per Subscription Receipt for gross proceeds of approximately $30 million (the “Offering”). All of the Subscription Receipts issued pursuant to the Offering have been exchanged for common shares of Dealnet on a one-for-one basis as of today’s date. The net proceeds of the Offering have been released from escrow and were used to pay a portion of the purchase price of the Acquisition.
EcoHome has a seasoned, profitable loan book of over $60 million and a year over year origination growth rate of approximately 40{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. The EcoHome portfolio consists of long term finance assets that have historically predictable revenue and cash flows. It operates on the same loan management software as Dealnet, making integration a straightforward process. Key EcoHome underwriters have transferred and/or increased their line capacity with the deal in support of the transaction and continued growth.
“This significant transaction elevates Dealnet’s lending business to a leading competitive position in this sector. The quality of the loan book within the home improvement space is demonstrated by 0.25{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} loan loss rates net of recoveries which continues to attract low cost underwriting,” said Michael Hilmer, Dealnet’s Chief Executive Officer.
As part of the Acquisition, Dealnet acquires all customer contracts, vendor finance agreements, employees, operating platform, systems, agreements and other assets of EcoHome. Dealnet plans to combine treasury functions, technology, risk and credit management and overall origination capabilities with no job loss due to the considerable growth trajectory demonstrated by EcoHome and Dealnet.
“We are particularly pleased with the strong institutional support from our bankers and underwriters for our aggressive profitable growth strategy as we accelerate our plans to become one of the leading non-bank consumer lenders” said Dr. Steven Small, Dealnet’s Executive Chairman.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to dealer origination growth.
- Published in Dealnet News, Financial Technology, News Home
Dealnet Capital Corp. (DLS.v) Completes $30 Million Private Placement
Dealnet Capital Corp. Completes $30 Million Private Placement
– Momentum Public Relations – Feb. 05, 2016
Dealnet Capital Corp. (“Dealnet” or the “Company“) (TSX VENTURE:DLS) is pleased to announce that it has closed its previously announced private placement financing of subscription receipts (“Subscription Receipts”).
Dealnet issued, on a private placement bought deal basis, 54,545,700 Subscription Receipts at a price of $0.55 per Subscription Receipt (the “Offering Price”) for gross proceeds of $30 million (the “Offering”). The Offering was led by GMP Securities L.P. (“GMP”), Paradigm Capital Inc., Cormark Securities Inc. and INFOR Financial Inc. (collectively, the “Underwriters”).
Michael Hilmer, Dealnet’s Chief Executive Officer, commented: “We are very pleased with the support the market has shown in Dealnet and our strategic plan through this Offering. We remain on track to complete our purchase of EcoHome and significantly increase our loan book and organic origination volumes. The combination of EcoHome and One Dealer Financial Services, our current funding brand, is a powerful growth engine for Dealnet.”
Each Subscription Receipt entitles the holder to receive upon exchange thereof for no additional consideration, one common share of Dealnet in exchange for each Subscription Receipt upon satisfaction of certain escrow release conditions, including the satisfaction or waiver of all conditions precedent (but for the payment of the purchase price) to the closing by the Company of the acquisition of EcoHome Financial Inc. (the “Acquisition”), provided that the conditions have been satisfied by March 31, 2016. Please refer to Dealnet’s press release issued on January 21, 2016 for additional details about the Acquisition.
The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) among the Company, GMP and Computershare Trust Company of Canada, as subscription receipt agent. Pursuant to the Subscription Receipt Agreement, the proceeds of the Offering, net of Offering expenses and 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the Underwriters’ commission, have been placed in escrow pending delivery of the escrow release notice by the Company.
If the escrow release conditions are satisfied by 5:00 p.m. (Toronto time) on March 31, 2016, the escrowed funds (less the balance of the Underwriters’ commission) will be released to the Company. The Company will use such funds towards the cash portion of the purchase price of the Acquisition, and, any remaining proceeds, for Dealnet’s future growth as well as for general corporate purposes. In the alternative, if: (i) the Acquisition closing does not occur prior to 5:00 p.m. (Toronto time) on March 31, 2016; (ii) the share purchase agreement for the Acquisition is terminated at an earlier date; or (iii) Dealnet announces that it does not intend to proceed with the Acquisition, the subscription receipt agent and Dealnet will return to holders of Subscription Receipts an amount per Subscription Receipt equal to the Offering Price plus a pro rata share of the interest earned on the escrowed funds, if any, net of any applicable withholding taxes.
Certain directors, officers and employees of Dealnet participated in the Offering and purchased Subscription Receipts for gross proceeds of approximately $1.4 million.
In connection with the Offering, the Underwriters are entitled to a cash commission of $0.033 per Subscription Receipt (except with respect to sales to certain specified purchasers agreed upon by the Company and GMP to a maximum of $1,000,000 (the “President’s List”) in respect of which the Underwriters are entitled to a cash commission of $0.0165 per Subscription Receipt) and 3,218,200 non-transferable broker warrants (“Broker Warrants”). 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the Underwriters’ commission was paid and 1,609,100 Broker Warrants were issued on the closing of the Offering and the remaining 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the cash commission is payable and 1,609,100 Broker Warrants are issuable on the closing of the Acquisition. Each Broker Warrant is exercisable by the holder for one common share of Dealnet for a period of 18 months following the closing of the Offering at a price of $0.55 per Broker Warrant.
All securities issued in the Offering (including any common shares issued on the exchange of the Subscription Receipts) are subject to a hold period of four months and one day, expiring on June 6, 2016.
The Offering is subject to the final approval of the TSX Venture Exchange.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
- Published in Dealnet News, Financial Technology, News Home
Dealnet (DLS:V) to Acquire EcoHome Financial
Acquisition to be Financed by a $30 Million Bought Deal Private Placement of Subscription Receipts
Dealnet Capital Corp. (“Dealnet” or the “Company”) (TSX VENTURE:DLS) today announced that it has entered into a definitive agreement to acquire EcoHome Financial Inc. (“EcoHome”), a premier non-bank lender in the Canadian heating, ventilation and air conditioning (HVAC) and home improvement segments, from Chesswood Group Limited (the “Acquisition”) for total consideration of approximately $35 million.
The cash portion of the purchase price will be financed from the proceeds of a bought deal private placement of Subscription Receipts of the Company described below, led by GMP Securities L.P., Paradigm Capital Inc., Cormark Securities Inc. and INFOR Financial Inc.
Under the terms of the definitive agreement, Dealnet will acquire all of the shares of EcoHome, which has a seasoned loan book of over $60 million and a year over year origination growth rate of approximately 40{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. The EcoHome portfolio consists of finance assets that have historically demonstrated low default rates and predictable revenue and cash flows. Key EcoHome lending facilities will transfer, and be increased on close adding low cost incremental capacity to Dealnet’s existing funding facilities.
“Our current platform is designed for large scale volume and to accept these acquisitions with no disruptions to business operations. With our incremental significant scale in origination volume we expect additional capital efficiencies in terms of lowering the cost of underwriting, driving incremental yield,” said Michael Hilmer, Dealnet’s Chief Executive Officer. “This acquisition will establish Dealnet as a new leader in the HVAC/Home Improvement consumer financing segment with a full market offering and end-to-end value added services. We continue to see opportunity for accretive acquisitions in markets where our equity and lending capacity, is a valuable currency. We will continue to focus on strong organic growth while continuing to review complementary acquisitions.”
Steven Small, Executive Chairman, stated “We have delivered on our penetration into the HVAC/Home Improvement space. This strong advance now allows us to continue as planned into retail and healthcare consumer finance. Our march to become the dominant ‘prime’ non-bank consumer finance company is proceeding as planned.”
As part of the Acquisition, Dealnet will acquire customer contracts, vendor finance agreements, employees, operating platform, systems, agreements and other assets of EcoHome. Dealnet expects to combine treasury functions, technology, risk and credit management and overall origination capabilities with no job loss due to the considerable growth trajectory demonstrated by EcoHome and Dealnet.
Under the terms of the agreement, Dealnet will satisfy the purchase price by a combination of (i) approximately $30 million in cash, (ii) common shares of Dealnet having an aggregate value of $3 million, and (iii) an unsecured convertible vendor take-back note in the principal amount of $2 million.
The Acquisition is expected to close in February, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.
Cormark Securities Inc. and INFOR Financial Inc. are acting as the financial advisors to Dealnet on the Acquisition.
Bought Deal Private Placement
Dealnet has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P., Paradigm Capital Inc., Cormark Securities Inc. and INFOR Financial Inc. (the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a “bought deal” private placement basis, 54,545,700 subscription receipts (the “Subscription Receipts”) of the Company at a price of $0.55 per Subscription Receipt (the “Offering Price”) for gross proceeds of approximately $30 million (the “Offering”).
Dealnet has also granted the Underwriters an option, exercisable up to two business days prior to the closing date of the Offering, to arrange for the purchase of up to an additional 8,181,855 Subscription Receipts at the Offering Price for additional gross proceeds of approximately $4.5 million. The net proceeds of the Offering will be used to fund the cash portion of the purchase price of the Acquisition, and Dealnet’s future growth as well as for general corporate purposes.
Each Subscription Receipt will entitle the holder thereof to receive, without payment of further consideration or further action, one common share of Dealnet (a “Common Share”) in exchange for each Subscription Receipt upon satisfaction of certain escrow release conditions, including the satisfaction of all conditions precedent (but for the payment of the purchase price) of the Acquisition, provided that the conditions have been satisfied by March 31, 2016.
The Subscription Receipts will be issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”). Pursuant to the Subscription Receipt Agreement, the proceeds of the Offering, net of 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the Underwriters’ fee payable in connection therewith, will be held in escrow pending delivery of notice of the closing of the Acquisition. If: (i) the Acquisition closing does not occur prior to 5:00 p.m. (Toronto time) on March 31, 2016; (ii) the Acquisition share purchase agreement is terminated at an earlier date; or (iii) Dealnet announces that it does not intend to proceed with the Acquisition, the subscription receipt agent and Dealnet will return to holders of Subscription Receipts an amount per Subscription Receipt equal to the Offering Price plus a pro rata share of the interest earned or deemed to be earned on the escrowed funds, net of any applicable withholding taxes.
The Offering is expected to close on February 5, 2016 and is subject to certain conditions, including the receipt of TSX Venture Exchange approval.
The Subscription Receipts will be sold in all of the provinces and territories of Canada on a private placement basis pursuant to the “accredited investor” exemption under National Instrument 45-106 – Prospectus Exemptions and certain other available and agreed upon exemptions. The Subscription Receipts, including the underlying Common Shares, will have a hold period of four months and one day from the closing date of the Offering.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
For additional information please visit www.sedar.com.
- Published in Dealnet News, Financial Technology, News Home
Dealnet Announces Closing of Debenture Offering of Up to $100 Million
TORONTO, ONTARIO–(Marketwired – Jan. 13, 2016) – Further to its press release of December 21, 2015, Dealnet Capital Corp. (“Dealnet” or the “Company”) (TSX VENTURE:DLS) is pleased to announce that its wholly owned subsidiary, One Dealer Inc., has closed a secured debenture offering and issued an initial $10 million debenture (the “Debenture”) with capacity to issue up to $100 million under the established structure.
The versatile structure of the financing allows for the warehousing before securitization as well as term funding of consumer finance contracts with terms of up to ten years. The transaction structure supports the Company’s expansion plans to capture a wide variety of consumer finance products at point of sale including home improvement, health care and retail financial solutions.
The Debenture has a term of ten years and carries a fixed interest rate of 5.99{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. The rate applicable to future issuances will be fixed at the time of draw at the 10 year Government of Canada Benchmark Bond yield plus an appropriate margin. As part of the transaction, the Company repaid its existing $3 million debenture to the same subscriber instead of amending the instrument as previously announced (for net cash proceeds from the offering of $7 million to the Company). Future debenture issuances are at the discretion of the subscriber.
As a part of the offering, the Company issued 2,000,000 common share purchase warrants (the “Warrants”) to the subscriber. The Warrants have an exercise price of $0.67, expire on January 12, 2019 and are subject to a four month hold period until May 13, 2016. The issuance of the Warrants is subject to final acceptance by the TSX Venture Exchange.
“We have built an exceptional relationship with IA Clarington Investments, the subscriber, and we are now being rewarded for our proven execution and risk management methodologies,” stated Mike Hilmer, CEO of Dealnet. “On full draw, the debentures would support approximately 20,000 additional funded loans or leases in our home improvement vertical. The Debenture structure also co-exists well with additional underwriting facilities expected to be announced this year, which together expand our treasury capability to support significant growth within our financial services division. Our expanded capacity and flexibility supports our drive to be the emerging growth leader in the non-bank lending space.”
Forward Looking Statement
This news release contains certain “forward-looking information” within the meaning of applicable securities law including statements regarding the Company and the Debenture, its expected terms and closing date. Forward looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “would”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s Management’s Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
For additional information please visit www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
- Published in Dealnet News, News Home
DealNet (DLS:tsxv) Acquires Gemma Communications for $7-million
DealNet Builds out Engagement and Finance Platforms with Acquisition
DealNet Capital Corp. (“DealNet” or the “Company”) (TSX VENTURE:DLS), is pleased to announce that it has acquired Gemma Communications (“Gemma”) for consideration of up to $7 million. The purchase is structured with an initial cash payment of $2.5 million, deferred payments of up to $1.5 million and a maximum earn out of up to $3 million based on forecasted revenue targets.
Gemma is a leader in Canadian outsourced engagement and marketing solutions for the financial services and telecom sectors with operations in Toronto and Montreal. This acquisition extends DealNet’s platform by driving significant service economies of scale that progressively lowers the per transaction cost of originating and servicing its consumer finance business while expanding the operational footprint of DealNet.
As part of the share purchase, DealNet will acquire the employees, operations, systems, offices and other assets of Gemma. This acquisition is expected to double DealNet’s engagement revenue in 2016 and positions the company for future transactions in the Fintech space with significant shared servicing capabilities.
“The combined operating platform adds significant economies of scale for origination and servicing of our finance customers and dealers at a progressively lower cost and fortifies the physical and geographical market buildout for large scale national originations”, stated Mike Hilmer, CEO of DealNet.
About DealNet Capital Corp.
DealNet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. DealNet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
DealNet Announces Key Executive Appointments
DealNet Announces Key Executive Appointments: Roy Murzello as SVP of Consumer Finance Business and Michael Hilmer as CEO
DealNet Capital Corp. (“DealNet” or the “Company”) (TSX VENTURE: DLS) is pleased to announce that it has named Mr. Roy Murzello, a Consumer Lending Veteran with 15 years of experience, as its Senior Vice President of Consumer Financial Services.
Mr. Murzello has spent the last 10 years as a Senior Leader at one of Canada’s largest providers of HVAC finance solutions. His various roles have included Director of Dealer Programs, where Mr. Murzello was directly responsible for leading and growing the dealer finance programs including HVAC leasing. In this role, he also led a large leasing business that was acquired and subsequently integrated into the core business. His prior experience includes Vice President for Citi Group managing a major credit card initiative, a Senior Underwriter Manager at GE Capital and Credit Manager at CIBC. Mr. Murzello has a Master of Business Administration degree from Simon Fraser University.
“Roy’s pedigree is synonymous with large scale finance book management and risk mitigation. His experience with acquiring and operating large scale finance books, underpinned by strong governance and risk management fits our growth plans perfectly”, stated Michael Hilmer, Chief Executive Officer of DealNet.
The Company also appointed Mr. Michael Hilmer as its permanent Chief Executive Officer. Mr. Hilmer is a co-founder of DealNet and has served as the Company’s Interim CEO since March.
“Michael has performed at an exceptional level as Interim CEO and has earned our full confidence that he is the best choice for the CEO role” says Dr. Steven Small, Executive Chairman of the Corporation.
About DealNet Capital Corp.
DealNet is a consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. DealNet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
Gary Schwartz: “6 mobile-oriented services to complement the live operator experience”
– DealNet Capital’s (DLS:tsxv) SVP of Corporate development Gary Schwartz discusses mobile-oriented services in the Mobile Marketer online publication –
Mobile Marketer: http://www.mobilemarketer.com/cms/opinion/columns/20979.html
Until 2015, business process outsourcing (BPO) was based on a simple math formula: outsourcing non-core services including customer call centers to more cost-efficient partners and markets to reduce spend.
When technology was deployed, it was predominately committed to optimizing the BPO infrastructure and managing “bums in seats.” BPO suppliers focused on solutions that could mitigate operational costs and driving process efficiency.
However, as the end consumer becomes increasingly mobile, equipped with smarter devices and, most importantly, higher customer service expectations, Corporate America needs to address how best to service this new customer.
In 2015, BPO needs to move beyond managing call center bodies. This is particularly important to inbound call centers.
As the vast majority of consumers use their always-ready mobile phones to reach the call center services, providers need to revisit their call center architecture and develop mobile-centric efficiency throughout the lifecycle of the call.
BPO companies have traditionally differentiated their services by providing workers at a lower cost.
Historically, operations focus on large-scale transaction processing beating the clock on handling times: i.e. average hold time – AHT, or average speed of answer, ASA. These business models need to be revisited.
As in other verticals such as retail, health and finance, the consumer is now at the center of operational design, and customer satisfaction is the new and key performance index.
The challenge for many providers is executing on this vision.
Making the call
Designing mobile hooks, leveraging new APIs to enhance the existing call flow and creating omnichannel content delivery is outside the scope of most call center operations.
We see this shift in national and municipal services such as Next Generation 9-1-1 in the Canadian market and Next Generation 3-1-1 service in cities such as Chicago and New York where the incumbent call center now offers onmichannel interactions catering to the mobile user.
SMS-based call flows allow for instant information. Operator text chat via SMS and application layers allow for on-the-go convenience as well as operational efficiency and cost savings for the call center.
The goal is to move away from an intelligent Siri-type system to an anticipatory GoogleNow-type approach. Delight the customer by anticipating their preferred channels and their time-sensitive needs.
This is no easy task.
For more than 20 years, BPO call center performance was measured, in large part, on cost-per-call or by the number of seats in a call center. This simplistic math led to globalization of services with early adopters such as GE and American Express moving operations to India in the early 1990s.
The Philippines’ BPO sector is the fastest-growing industry in the country with 900,000 Filipinos employed full time in 2013, providing an estimated 1.3 million new jobs in the IT/BPO sector by 2016.
However, as we move into 2016, the consumer is demanding smarter services from legacy call center IVR and live operators.
Ideal operator
At its core, the call center will continue to focus on availability, information accuracy and consistency.
While voice communication will remain the call center’s pillar, here are a number of key next-generational services that can complement and enhance the live operator experience:
1. Mobile triggers (calls to action, or CTA) to reach the call center. This has become a standard creative ad unit in mobile advertising. Traditional media also has leveraged mobile # or * services. This quick mobile access needs to become ubiquitous.
2. On-hold omnichannel selection. When customer security authentication is not a concern, providers can use the hold time to offer options to mobile callers that mitigate high abandonment rates (AAR) and optimize their on-the-go mobile requirements. Jumping into a text-based chat is an example.
3. Disconnect mitigation strategies. If the call is dropped, push text-to-queue services to make sure the customer is reentered into the priority line or trigger a callback service with instant SMS notification.
4. End-of-call informational push. Send end-of-call informational summaries – virtual sticky notes – via SMS to mobile callers with time sensitive information.
5. Customer satisfaction surveys. Always move a live call into a mobile C-SAT survey that can be completed at the customer’s convenience. Text-based multiple choice questions result in much higher response rates than IVR surveys.
6. CRM push follow-up. Acquire an opt-in to future communication from the caller. This allows for timely follow-up engagement/closure using the request channels to delight the customer.
THE BUSINESS FLOW can be made asynchronous, allowing the mobile consumer to jump into her preferred communication channel before, during and after the call.
Increased use of cloud-based technologies allow call center operators to differentiate their services and ultimately become Big Data and analytics shops providing insights to drive their clients’ business objectives.
This move will enable providers to participate in the business goals of their clients –a far cry from simply answering the phone cost-effectively.
Mobile Marketer: http://www.mobilemarketer.com/cms/opinion/columns/20979.html
Dealnet Capital Corp. (DLS:tsxv) Changes the Financial Face of Home Improvement
“Traders may be intrigued by the fact that DealNet is a unique player within the lending market with an incredible amount of upside potential.”
DealNet will initially focus on a unique approach to the large and established “HVAC” finance sector. “This established market is the initial entry point for our consumer finance plans” says Small.
The target market is the seriously underserved small business Heating, Ventilation and Air Conditioning (“HVAC”) dealers who sell furnaces and air conditioning systems to consumers by providing the dealers with various financing alternatives for their customers. DealNet also provides its dealers with back office support, including call answering and scheduling services, through its existing Business Process Outsourcing (“BPO”) platforms, the Company’s other already established core business. Combined, these financing tools and the provision of back office support services result in a highly profitable and scalable solution for independent HVAC dealers, allowing them to stay focused on servicing their customers. DealNet’s complete solution dramatically improves sales for the dealers while allowing them to retain their customers’ servicing needs and alleviating the costs and time required to manage their businesses like larger competitors do.
Small to mid-market HVAC dealers are also at a competitive disadvantage compared to larger dealers. When it comes to money in the till, they have limited buying power and as a result are unable to obtain volume discounts which directly impact their profit margins. These dealers have little opportunity for recurring revenues unless the consumer signs up for home service plans or rental plans. DealNet frees these dealers from overhead worries, provides improved profits margins from sales and service contracts through its finance programs and allows HVAC dealers to focus on what they do best.
Over $7.9 billion is currently spent on mechanical improvements alone in Canada and DealNet expects to capture a significant share of that spend. It also plans to add additional loan products to increase their share of home improvement spending outside of HVAC.
All of this makes DealNet’s offering a win-win for both consumers and the businesses serving them.
So how secure is this financing game? First, let’s take a look at how DealNet powers its business model. Its financing platform is funded by its engagement segment. This established and highly successful business unit continues to grow. Having this engagement business in their pocket results in driving the cost of onboarding and servicing small and mid-market dealers down to a point where it becomes accretive to the overall business. Since the dealer is now the Company’s channel, DealNet benefits from low cost high volume originations and can capitalize on the high yield underwriting of the credit worthy consumer finance market while maintaining a loss ratio of under 2{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}, below industry benchmarks.
These finance programs provided through DealNet’s network of dealers will provide at least 10 years of recurring revenues and cash flows. Since DealNet launched its dealer financing programs back in January, the company has hit the ground running and is presently growing its dealer member base month over month. The Company is currently expanding its financial services team including adding sales teams to attract and on-board the dealers.
How will it reach this target? Well, in addition to direct to dealer programs, DealNet will continue to build its market reach through a series of strategic partnerships with leading HVAC manufacturers and distributors. This gives the Company access to its partner’s dealer networks and also provides DealNet with preferred pricing for HVAC products. Speaking about interest margins, this is a growing enterprise with strong interest margins which are expected to increase as it continues to add additional underwriters.
So what does the market think? Valuation seems to be a boon of the sector as comparable lenders hitting an average 21.4x LTM earnings and 1.7x book value with an average ROE of 9.6{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} (LTM). It would seem to me that if the market treats DealNet as it has classically treated its comparables, investors could see a phenomenal growth in their investment as DealNet, already capable of delivering $12 million per year in revenue with its BPO segment, leverages its recently announced $50.0 million credit facility to reach its targets through organic growth and several identified strategic acquisitions.
DealNet has the brainpower to get there with such large-cap board heavyweights as Dr. Steven Small who co-founded Newcourt Credit and Element Financial. The former provided hundreds of vendor programs to consumers and manufacturers. Michael Hilmer, President and CEO of DealNet, went on to illustrate, “Dr. Small took on the role of Executive Chairman and attracted outstanding directors including Harold Bridge, sitting chair of the Element Financial Audit Committee. Harold assumed the role of Chair of our Audit Committee. Harold is also our Lead Independent Director and is essential to ensuring that with our rapid growth we continue to stay within the boundaries of risk and governance ensuring long term profitability.”
“Another valuable addition was Brent Holden. Brent is a leader in the retail strategy and operations space, previously on the board of Deloitte and leading their retail industry group. Brent helps his customers find solutions to engage with their ever-changing customer set and provides strong insights and strategy as to where we take our engagement and financial solutions next.”
“Last but not least, there’s John Radford. John built the Ford Canada Red Carpet leasing business and helps us package our solutions for consumer consumption including marketing and branding of same. He also has a deep network of contacts in credit which we intend to tap as we hire the best-in-market people to scale our financial services portfolio.”
Landing this powerhouse board was a major achievement for DealNet, but the Company has more up its sleeve this year that investors can look forward to as Hilmer explained, “We up-listed this week to the TSX Venture Exchange and we are always looking at various acquisition opportunities. Another thing to note is that we are continually in pursuit of additional underwriting to fund our lending businesses and those strategies are maturing through 2015.”
Traders may be intrigued by the fact that DealNet is a unique player within the lending market with an incredible amount of upside potential. With capital markets preferring long-term revenue, yield and securitization based companies, DealNet has the capability of becoming a market darling with a growth rate dwarfing any other company within its consumer finance sector. Dr. Small has the track record and there’s every reason to expect that he’ll deliver on this next venture into the finance sector.
Development is behind it and DealNet has spent a worthy amount of time to place all of its ducks in a row. Now it’s time to execute its plan and grow into its potential. The challenge lies in scaling their operations to match their growth, but with the brain trust in place, DealNet plans to harness the tailwind to become a dominant player in the consumer lending market and provide their shareholders with something very pleasing to write home about.
DealNet Capital Corp. (DLS:tsx-v) to Commence Trading on the TSX Venture Exchange
DealNet Capital Corp. (“DealNet” or the “Company”) (TSX VENTURE:DLS) is pleased to announce that its common shares will commence trading on the TSX Venture Exchange under the stock symbol “DLS” on July 28, 2015. Dealnet’s common shares were delisted from the Canadian Securities Exchange at the close of trading on July 27, 2015.
About DealNet Capital Corp.
DealNet Capital Corp. focuses on two key vertical markets, Consumer Engagement and Consumer Finance. Through acquisitions, the Company has become a leader in the Consumer Engagement space helping their corporate customers ‘speak’ to their consumers the way they want to be spoken to using live Voice, Chat, Text, Email and Proximity based engagement solutions. The Company has leveraged its engagement business to offer home improvement financing solutions to consumers, which offer attractive yields and low default rates. The Company continues to seek acquisitions in these key markets.
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