Listing candidate Shawbrook in talks to buy SME lender ThinCats for £180m

The British-based bank Shawbrook is in talks to buy ThinCats, a lender to medium-sized businesses, in a deal worth about £180m.

Sky News has learnt that the two companies are in exclusive discussions about a deal following an auction of ThinCats conducted by bankers at Fenchurch Advisory Partners. Sources said the exclusivity period was due to end shortly.

A deal to buy ThinCats would strengthen Shawbrook's alternative financing capabilities as it prepares for a £2bn flotation on the London Stock Exchange. Shawbrook's plans to go public were revealed by Sky News at the start of this year, although the timing of a flotation has been pushed back by persistent market uncertainty.

Shawbrook, which employs close to 1,600 people, has well over 500,000 customers. Founded in 2011, it was established as a specialist savings and lending institution, providing loans for home improvement projects and weddings, as well as business and real estate lending.

In recent years, it has explored a string of sizeable corporate transactions, including mergers with or takeovers of rivals including Metro Bank, Starling Bank and the Co-operative Bank. BC Partners and Pollen Street own equal stakes in Shawbrook, with its management team also owning a minority.

The bank is run by Marcelino Castrillo, chief executive. If its pursuit of ThinCats is successful, it will add another leg to its business lending to SMEs.

In the 12 months to 30th June, ThinCats provided £381m of funding to businesses, a modest increase on the previous financial year's £378m. The company said that lending to owner-managed businesses had surged, especially following the autumn budget last November.

In total, ThinCats has now lent more than £2bn to businesses across the UK, with assets under management standing at just under £1bn. ThinCats is run by chief executive Amany Attia, who is also a shareholder in the business.

In 2021, it announced a £160m investment from Wafra Capital Partners, a New York-based investment firm which is affiliated to an arm of the Kuwaiti state. ThinCats declined to comment, while Shawbrook could not be reached for comment..