European credit management services group Intrum Justitia is to acquire UK debt purchaser 1st Credit from private equity firm Bridgepoint for an enterprise value of £130m, subject only to regulatory consent.
1st Credit is an award-winning ethical debt purchaser that acquires debt portfolios from banks, utility suppliers and telecoms companies and enters into long-term repayment agreements with consumers.
Headquartered in Reigate, 1st Credit was acquired by Bridgepoint in 2004. It has over 100,000 customers and arrangements of more than £300m. In 2015 it increased collections revenue by 18% to £50.1m and reported EBITDA of £33.2m, up from £27.3m in 2014. The company holds a position on all major debt purchase panels in the UK.
Authorised by the Financial Conduct Authority (FCA), 1st Credit has achieved a three star Investor in Customers accreditation for three years running for its high levels of customer service. It holds a +44% net promoter score - unprecedented in this industry.
Intrum Justitia, which is listed on the Stockholm Nasdaq, has more than 90 years of experience, 19 offices across Europe and an international network covering 160 additional countries.
"By acquiring 1st Credit, we strengthen our ability to service clients in the financial industry and we take another important step towards accelerating the growth of Intrum Justitia. The UK market is one of the largest and most developed in Europe. With 1st Credit, we acquire a strong unit with a solid organization which we believe can grow into one of the market leaders in the UK in the coming years," says Mikael Ericson, President and CEO of Intrum Justitia AB.
Intrum intends to retain the existing UK management team, led by Chairman Leith Robertson and Chief Executive Eddie Nott.
Commenting on the transaction, 1st Credit Chairman Leith Robertson said: "We are delighted to join Intrum Justitia and become its UK debt purchase and collection business. As the European market leader with a solid financial position, it is well placed to leverage 1st Credit's expertise, knowledge of the complex compliance requirements, and relationship with UK bank purchasing panels and corporate customers. We look forward to working as part of its successful specialist debt recovery and debt portfolio purchasing arm."
1st Credit Chief executive Eddie Nott said: "1st Credit's strong relationships with creditors, our presence on all the major debt purchase panels and our renowned ethical credentials offer a clear opportunity for expansion in the UK. Joining Intrum Justitia gives us access to their expertise and lower cost of capital, both of which will enable us to increase purchase levels significantly. We look forward to working with the team at Intrum Justitia to expand the business."
Bridgepoint was advised in the transaction by Travers Smith.
For all press enquiries, contact James Murray on +44 (0) 20 7034 3555