Case study: How private credit helped accelerate a strategic acquisition and protected investor capital

In 2020, Privity Credit was approached to finance a strategic acquisition in the highly specialised vehicle financing and smash repair sector.

The borrower, Movigo Group (formerly known as Growth Factor Group), had built an impressive business through its subsidiary, Torque Factor (TF), which offered working capital finance to smash repairers. TF had become the largest provider of invoice factoring and “not at fault” repair recoveries in Australia.

Movigo saw an opportunity to go one step further by acquiring Right2Drive (R2D), a dominant provider of temporary replacement vehicles to drivers involved in not-at-fault accidents. R2D worked with over 1,000 smash repair businesses and hundreds of tow operators, delivering more than 40% of replacement vehicles in the Australian market.

The acquisition would create the largest player in a multi-billion-dollar niche: funding, recovering and replacing vehicles in the smash repair ecosystem. The deal made strategic sense – both businesses operated in the same sector, worked with the same customers and used the same legal and collections infrastructure.

However, timing was tight. R2D’s parent company, the ASX-listed Eclipx (ECX), needed to divest non-core assets to strengthen its balance sheet. Movigo needed to act quickly and with certainty.

On paper, this could have been a classic bank financed transaction. The businesses were proven, profitable and asset-rich. The receivables were high quality, with highly rated insurance companies like Suncorp acting as the ultimate payers.

Unfortunately banks could not move fast enough. Large bank processes meant approvals and risk assessments that could not meet the deal timeline. One major bank was interested but they needed more time than the seller would allow. (Interestingly, 18 months later this bank ultimately refinanced Privity Credit. We will come back to this.)

Enter private credit.

Privity Credit offered a bespoke $25 million loan solution: senior secured, conservatively structured and built to be repaid from the business’s own receivables.

This was not an aggressive mezzanine loan or equity-like instrument. It was a senior secured, asset-backed facility with a structure designed to protect investor capital.

Key details included:

Loan size: $25 million
Term: 2 years with a 2-year extension option
Security: First-ranking over all group assets including receivables
Receivables pool: $47 million (after provisions)
Initial cash balance: >$10 million
Effective LVR: ~53% gross, ~32% net of cash
Covenants: Max debt to eligible receivables of 0.8x, minimum $5 million equity contribution, dividend restrictions for 12 months

The receivables were robust, made up by claims against major insurers and backed by court-tested recovery processes. The facility was also self-liquidating, meaning it paid down over time from receivables collections, further reducing risk.

Independent due diligence was conducted on both the sale and the acquisition by reputable third parties (PwC, PKF and Thomson Geer) and the business had a strong, experienced management team in place.

Every deal carries risk so Privity Credit’s approach is to identify, mitigate and monitor.

• Receivables quality: With insurers as end-debtors, the credit quality was effectively “insurance-grade.” Advance rates were kept low and conservative provisioning was applied.
• Fleet utilisation risk: R2D used short-term leased vehicles to improve flexibility and reduce idle capital – an operational risk mitigated by not tying the loan to vehicle assets.
• Refinance risk: The structure was amortising and conservative, with early refinance interest already in place.
• Integration risk: Both businesses already operated in the same ecosystem and management had a proven track record.
• Regulatory risk: Considered modest and mitigated by the self-liquidating nature of the receivables.

The loan did exactly what it was designed to do: it gave Movigo the certainty and flexibility it needed to acquire R2D and integrate it into the group.

Within the agreed timeframe, Movigo successfully acquired the business and began executing its growth strategy. Interest was paid on time, covenant compliance was strong and by the end of the loan term, the business had attracted the continued attention of a big 4 bank which refinanced the facility, fully repaying Privity Credit and its investors.

This deal demonstrates that private credit is really about helping strong businesses grow through providing capital that is structured, secured and smart.

For Privity Credit’s investors, the deal delivered:

• High single-digit returns when cash rates were near zero
• Low credit risk with conservative LVRs and insurance-grade receivables
• Timely liquidity with full repayment ahead of schedule

Private credit is not just for distressed companies. It is often about great businesses needing flexible capital when timing matters.

Investors are not taking equity-style risk. With the right manager, deals are structured conservatively, with strong security and risk controls.

The bigger story is that there are positive private credit transactions playing out all the time. Quietly hundreds of well-executed, risk-adjusted investments are delivering consistent income and protecting capital. You just won’t read about them in the media.