Premium finance company Prompt has completed the £2.4m acquisition of Tifco in a deal that should let it challenge the market leader Premium Credit.
The combined amount of financing of the second and third biggest players in the market, which will be merged under the Prompt banner, will be around £1bn, just behind Premium Credit's £1.25bn.
The deal will bring the number of brokers using Prompt to around 3,500.
Prompt chief executive Bob Golden said its parent company, Close Brothers, had been approached by Aegon, Tifco's Dutch owners, in September to see if it was interested in acquiring the company.
Tifco had been rumoured to be for sale since its US parent Trans-america was acquired by Dutch insurer Aegon in January and the insurer announced that it wanted to divest itself of Transamerica's non-insurance business.
Golden said of the approach: "We took a long hard look and thought 'yes, it is a good deal for us'."
Golden said the crux of the decision was whether Prompt's technology could be used to make a smooth changeover. "The Iprompt facility will be available to all Tifco brokers by the end of March," Golden said.
"For all Tifco's brokers it will be business as usual," he added.
The premium credit market is expanding and current players have reported substantial growth this year. Cox Insurance recently entered the market with its Can Do company.
The merger itself should be completed by the end of June with the new company based in Tolworth, Surrey. Tifco is currently based in Hitchin, Hertfordshire.
Golden said there were likely to be a few job losses as there was bound to be duplication of roles. But he stressed that efforts would be made to find alternative positions in both Prompt and its parent company Close Brothers.
Golden said Tifco's Dublin office would definitely be kept open and the future of the Amsterdam office was currently under review.
But Golden would not be drawn into discussion on the future of Tifco's managing director Ian Jerrum. He said: "I don't want to comment on the directors."
The deal first came to light in Insurance Times a month ago. Bob Golden, Prompt's chief executive, said the acquisition had been protracted due to the international nature of the negotiations.
The net assets being acquired are estimated to be £1m and in the last financial year Tifco earned profits after tax of around £170,000.
