People’s United Bank Acquires VAR Technology Finance
People’s United Bank has acquired VAR Technology Finance, a private, independent leasing and finance company that supports channel partners and their end-customers across small, medium and large business technology engagements.
VAR Technology Finance, launched in 1990, provides financing for commercial and public sector customers. The effort includes private label programs for technology vendors and their channel partners. The financing business has more than 25,000 end-user customers.
VAR Technology Finance, headquartered in Mesquite, Texas, will maintain its brand and become a division of LEAF Commercial Capital (LEAF) — which is an operating subsidiary of People’s United Bank.
VAR Technology finance generated $180 million in originations for 2018. LEAF, by contrast, has financed over $6.8 billion for more than 250,000 customers nationwide since its 2002 founding, the company says.
The two companies apparently knew each other long before the M&A deal emerged. Indeed, VAR Technology Finance and LEAF have been business partners “for many years” and LEAF has a “deep understanding of their business model” along with a similar culture, according to Crit DeMent, chairman and CEO of LEAF.
Channel Partner Financing, Subscription Services and Device as a Service
The deal puts a bright spotlight on the IT channel, where VARs and managed services providers (MSPs) often work with technology vendors to finance various deals for end-customers. The financing industry has been evolving rapidly as customers and partners increasingly shift from CapEx to OpEx technology consumption models.
The move toward OpEx subscriptions increasingly includes device as a service — PCs, notebooks, servers and other infrastructure paid for on a monthly basis. That model has frequently forced hardware companies, distributors and channel partners to explore financing models — including options like Hardware as a Rental, first popularized by Great America Financial Services.
People’s United Bank Acquires VAR Technology Finance: Executive Perspectives
Explaining the deal, People’s United Financial CEO Jack Barnes said:
“VAR’s sole focus and knowledge of the technology sector for nearly 30 years is a critical component of this acquisition, allowing us to further expand our equipment leasing and finance offerings into the technology sector. VAR will be a valuable addition to our equipment finance portfolio and enhance the client experience.”
Added Gary Sutton, president and CEO of VAR Technology Finance:
“With People’s United and LEAF, we will strengthen our infrastructure and access to capital and marketing capabilities, allowing us to accelerate growth and expand resources to better serve our clients.”