ePlus Enters Into Agreement to Sell Financing Business to PEAC, a Portfolio Company of HPS Investment Partners, LLC
- Strategic transformation into a pure-play technology solutions provider
- Provides additional capital for growth and acquisition opportunities
- Enables focused investment in high-growth areas like AI and cybersecurity
- Maintains ability to offer financing services through partnership with PEAC
- Loss of direct control over financing business revenue stream
- Potential transition risks during business separation
Insights
ePlus divests financing business to become pure-play tech solutions provider, freeing capital for AI, cybersecurity and acquisition opportunities.
This strategic divestiture represents a significant pivot in ePlus's business model, transforming the company into a pure-play technology solutions provider. By selling its U.S. financing business to PEAC Solutions, ePlus is making a calculated decision to streamline its operations and reallocate capital toward higher-growth technology segments.
The move appears strategically sound given current market dynamics. The technology solutions sector generally commands higher valuation multiples than financing businesses, which tend to be more capital-intensive and sensitive to interest rate fluctuations. This transaction should improve ePlus's financial flexibility and potentially its margin profile.
The company has explicitly identified key growth areas where it plans to direct its resources: AI, cybersecurity, data center modernization, high-performance networking, and related consulting and managed services. These segments represent some of the fastest-growing areas in enterprise technology, particularly AI and cybersecurity, which are seeing accelerated adoption across industries.
What's particularly noteworthy is the company's stated intention to pursue both organic and inorganic growth strategies. The freed-up capital from this divestiture provides ePlus with enhanced financial flexibility to pursue strategic acquisitions to bolster its technology capabilities and expand its customer base. This suggests management is positioning for a more aggressive growth phase.
The arrangement to continue offering financing services to customers through PEAC represents a pragmatic approach - ePlus maintains the value-added service for customers without the associated capital requirements and risk exposure. This partnership model could potentially deliver the best of both worlds: continued customer service without the balance sheet constraints.
Divestiture Positions ePlus as a Pure-play Technology Solutions Provider
"We are pleased to announce the divestiture of our financing business to PEAC, a renowned industry leader that will continue our long history of providing excellent customer service, responsiveness, and creative financing solutions to our customers," stated Mark Marron, CEO and president of ePlus. "Given the rapidly evolving technology industry, the sale of our financing business gives us incremental capital to focus on growth opportunities and acquisition opportunities in the technology and services space."
"It also strengthens our ability to continue to invest in high growth areas of AI, cybersecurity, data center modernization, high performance networking and related consulting and managed services, while providing us the flexibility to accelerate plans around expanding our footprint and customer base. We are reimagining the role that ePlus can play for its customers, partners and shareholders, and are excited to continue to build our solution and services capabilities via organic and inorganic growth as we move forward. We will continue to offer the value-add of financing services to our technology customers and vendors through PEAC, which is a well-respected and experienced financing platform servicing the needs of tens of thousands of organizations."
ePlus was represented by Macquarie Capital (
About PEAC Solutions
PEAC Solutions is a leading multinational asset finance platform specializing in providing innovative finance solutions to equipment manufacturers, distributors, and dealers across a wide range of industries and asset classes. With a strong focus on customer service, PEAC Solutions offers lease and loan products that enable businesses to access the equipment and technology they need to enhance productivity and growth. Operating across
PEAC Solutions is a trademark of Marlin Leasing Corporation.
About ePlus inc.
ePlus is a customer-first, services-led, and results-driven industry leader offering transformative technology solutions and services to provide the best customer outcomes. Offering a full portfolio of solutions, including artificial intelligence, security, cloud and data center, networking and collaboration, as well as managed, consultative and professional services, ePlus works closely with organizations across many industries to successfully navigate business challenges. With a long list of industry-leading partners and more than 2,100 employees, our expertise has been honed over more than three decades, giving us specialized yet broad levels of experience and knowledge. ePlus is headquartered in
ePlus®, Where Technology Means More®, and ePlus products referenced herein are either registered trademarks or trademarks of ePlus inc. in
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and other similar words or expressions, or the negative thereof, generally can be used to help identify these forward-looking statements. Examples of forward-looking statements include statements relating to the anticipated benefits of the sale of our financing business, which is subject to certain closing conditions and a number of adjustments to the initial consideration paid to us; the timetable for completing the sale of our financing business, which may not be completed in a timely fashion or at all, may disrupt our business operations, and may be more difficult or costly than expected; and any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. Forward-looking statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to general conditions in the economy and our industry, including those due to regulatory changes, the ability of the parties to consummate the closing of the transaction, the performance of the legacy financing business, as operated by PEAC after the closing, and other important factors disclosed previously and from time to time in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Current Reports on Form 8-K. All of the information set forth in this press release is current as of the date of this release and ePlus undertakes no duty or obligation to update this information either as a result of new information, future events or otherwise, except as required by applicable
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SOURCE EPLUS INC.
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