Lacavera's firm buys TD's private credit card business for $250M
After shaking up the Canadian wireless industry a decade ago by launching Wind Mobile, entrepreneur Anthony Lacavera is taking another shot at disrupting the tech industry.
Financial technology company Flexiti Financial will announce Thursday it is acquiring Toronto-Dominion Bank's (TD.TO) Canadian private label credit card portfolio for $250 million, Lacavera told BNN Bloomberg. Flexiti was founded in 2013 and is controlled by Globalive Capital Inc., the investment company founded and chaired by Lacavera. The fintech firm facilitates loans for retailers seeking to offer customers better financing terms on big-ticket items such as furniture or jewelry.
The acquisition of TD's credit portfolio provides Flexiti and Globalive with access to more than one million customers and 900 businesses in need of alternative financing, such as jeweler Birks Group and furniture company La-Z-Boy Inc.
The transaction is backed by a $350 million credit facility led by Credit Suisse AG, a syndicate of mezzanine lenders and a $50 million equity investment by Globalive Capital.
The Flexiti deal marks Lacavera’s first step in a broader play to propel burgeoning technologies like blockchain and artificial intelligence into viable businesses.
"From a consumer credit point of view, this deal [with TD] makes Flexiti one of the biggest fintechs in Canada," Lacavera said.
Lacavera went from an unknown regional telecom entrepreneur to a national wireless player overnight in 2008, after Wind won enough 3G spectrum in a government auction to launch a Canada-wide cell phone company, thrusting him against the Big Three telecom giants – Rogers Communications Inc., Telus Corp. and BCE Inc. Despite some operational challenges following its 2009 launch, Wind added nearly one million subscribers by the time it was acquired by Shaw Communications Corp. in December 2015 for $1.6 billion.
Since then, Lacavera stepped back from being a Canadian company’s public face and focused on other ventures, including commentating on entrepreneurship issues and authoring a book urging Canadian businesses to better compete globally.
The Flexiti-TD deal comes a week ahead of the listing of Globalive Technology Partners, Inc., of which Lacavera is chief executive officer, on the TSX Venture Exchange. After recently closing a private placement that raised $30 million, Globalive Technology will begin trading on the market with a market capitalization of about $150 million. The company aims to develop commercial uses for blockchain technology and already has several partnerships underway including Coinsquare and a cryptocurrency token backed by Kodak, Lacavera said.
Globalive Capital owns a majority stake in Flexiti but that will be potentially transferred to the publicly-traded Globalive Technology in the coming months as it remains subject to shareholder approval, he added.
"This business is way harder than selling a cell phone at a retailer, but it's way easier than getting the permits to build a [cell phone] tower on a rooftop," he said.
Lacavera said he plans to launch two separate blockchain applications using Flexiti's customer base over the coming year. The first will enable direct lending between small-to-medium-sized companies, and the second will help retailers gain access to inventory from other retailers over a secure supply chain, he said.
The company plans to resell the blockchain software to other fintech companies and Flexiti, which would securely facilitate the loans, would be able to take a small cut of each transaction, Lacavera said.
"We envision a world in which we're one of the largest originators of loans in the world," Lacavera said. “We really want to enable the small-and-medium-sized merchants to work together and compete against bigger players."
An earlier version of this story inaccurately stated Leon's Furniture Ltd. is part of TD's private label credit card portfolio that Flexiti acquired. BNN Bloomberg regrets the error.