Arrow Global completes Italian job
Manchester-based purchaser and manager of debt Arrow Global has completed its £14m acquisition of Italian business Zenith Service S.p.A, having received regulatory approval from the Bank of Italy.
Arrow Global says the purchase, first announced in December, gives it immediate scale and presence in one of Europe’s largest debt markets.
Zenith is also a leading servicer of salary assignment loans (cessione del quinto or CQS), managing about €1.9bn of CQS assets. At June 2016, the estimated stock of the securitized market for CQS in Italy amounted to more than €3.2bn.
The acquisition will further expand Arrow’s European footprint, building on the its top three market positions in the UK, Portugal and Benelux and will reinforce its position as a major European debt purchase and management business.
The acquisition further diversifies the company’s income streams and increases the weighting of asset management revenues across the group, which it said will be around 25% of total revenues in 2017.
The deal is expected to be earnings neutral after taking into account amortisation of the acquisition intangible assets and is funded from cash resources, with 60% payable on closing and 40% payable 12 months after closing.
Lee Rochford, group chief executive, Arrow Global Group, said completion of the deal marks the company’s formal entry into the Italian structured finance market.
He added: “It gives us immediate scale and presence in one of Europe’s largest debt markets and we are excited by the possibilities this brings.
“Zenith has an experienced management team, a strong and established client base of leading Italian and international banks, and a great reputation for quality and service. It offers us an excellent platform from which to grow our business in Italy.”
Zenith was established in 1999 and manages and oversees securitised and non-securitised loan portfolios. The business has over 80 staff and typical clients include Italian and international banks, leasing companies, hedge funds and other financial entities.
