Credit card issuer Newday has reportedly agreed to purchase retail finance platform Deko in a bid to boost its tech credentials.
Newday has reached a deal to acquire Deko for up to £40m, depending on the tech provider’s performance, Sky News reported.
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If the purchase were to go ahead, it would be Newday’s first major acquisition since former Royal Bank of Scotland executive John Hourican was appointed chief executive in March.
Citing sources close to the deal, Sky News reported that Newday was seeking to diversify its business away from traditional credit card revenues and tap into the opportunities offered by new platforms such as Deko.
If the deal were to go ahead, Deko would continue to operate as a standalone business with its existing team, according to Sky News.
Deko offers finance products including consumer loans and installment credit via a panel of lenders.
The company says it has processed over £2bn in lending volumes over 10 years.
Newday is owned by private equity firms Cinven and CVC Capital Partners, who purchased the company in January 2017.
When Hourican was announced as its new boss last March, Newday said it had 4.7 million customer accounts and its receivables had reached £2.3bn in the first half of 2018.
The firm also operates co-branded credit cards with Amazon, Sir Philip Green’s Arcadia empire, and Debenhams.
Newday declined to comment on the reports.