COG Pays $40M to Expand Salary Packaging Across Five States
COG Financial Services is set to broaden its salary packaging and novated leasing footprint across Australia through the $40 million acquisition of EasiFleet. This strategic move positions COG for upcoming government contracts in key states.
- Acquisition of EasiFleet for $40 million plus up to $4.6 million deferred payments
- Expands COG’s salary packaging presence to five Australian states and territories
- Transaction expected to complete by 20 September 2025 with effective date 1 September
- Funding through cash reserves, debt facility, and minority shareholder contributions
- Positions COG strongly for New South Wales and Victorian government tenders
Strategic Expansion in Salary Packaging
COG Financial Services Limited (ASX – COG) has announced a significant acquisition that will expand its footprint in the salary packaging and novated leasing sector. The company is acquiring EasiFleet Pty Ltd for $40 million, with additional deferred payments of up to $4.6 million contingent on the extension of the Fringe Benefits Tax (FBT) exemption for electric vehicles. This move aligns with COG’s strategy to build a diversified and national salary packaging business.
National Coverage Strengthened
With this acquisition, COG’s subsidiary Paywise Pty Ltd now holds contracts across Western Australia, Northern Territory, Tasmania, Queensland, and the Australian Capital Territory. This expanded presence covers a significant portion of the Australian public sector workforce, enhancing COG’s ability to offer novated leasing and salary packaging services on a national scale. CEO Andrew Bennett highlighted that this foundation positions the company well for upcoming government tenders in New South Wales and Victoria, two key markets with substantial public sector employment.
Financial and Transaction Details
The $40 million purchase price reflects a multiple of six times EasiFleet’s FY25 EBITDA on a post-synergies basis. The transaction will be funded primarily through a combination of COG’s cash reserves and drawing on its existing debt facility, supplemented by contributions from minority shareholders. The deal is expected to complete by 20 September 2025, with an effective date backdated to 1 September 2025, ensuring immediate integration of EasiFleet’s operations into COG’s portfolio.
Contingent Payments and Policy Dependencies
The deferred payments of up to $4.6 million hinge on the continuation of the FBT exemption for electric vehicles, a government policy designed to encourage EV adoption. This introduces an element of uncertainty, as any changes in tax policy could impact the final cost of the acquisition. Nonetheless, the deal underscores COG’s confidence in the evolving regulatory environment and its commitment to sustainable vehicle leasing options.
Looking Ahead
COG’s acquisition of EasiFleet marks a pivotal step in consolidating its position within the salary packaging industry. By securing a broader geographic footprint and strengthening government relationships, COG is setting the stage for growth in a competitive market. Investors will be watching closely as the company prepares for the upcoming government tenders in New South Wales and Victoria, which could further accelerate its expansion.
Bottom Line?
COG’s bold acquisition sets the stage for national dominance but hinges on evolving government policies and tender outcomes.
Questions in the middle?
- Will the FBT exemption for electric vehicles be extended, triggering deferred payments?
- How will COG perform in the upcoming New South Wales and Victorian government tenders?
- What synergies and cost savings can COG realistically achieve post-acquisition?
