Credit group swoops for Nordic firms in £640m deal
A Leeds-based credit management services firm has acquired a Nordic carve-out business in a deal worth €730m (£640m).
Lowell, backed by the Permira funds and Ontario Teachers’ Pension Plan, has bought the carve-out from Intrum which comprises of Lindorff’s entire business in Denmark, Estonia, Finland and Sweden as well as Intrum Justitia’s entire business in Norway.
The transaction is valued at €730m on an enterprise value basis and is subject to the approval of Lowell as purchaser by the European Commission, as well as customary competition and regulatory approvals.
Lowell is headquartered in both Leeds and Essen in Germany. Previously named Lowell GFKL Group, Lowell was formed in 2015 following the merger of the UK and German market leaders: the Lowell Group and the GFKL Group.
It is backed by global private equity firm Permira – whose funds first invested in 2015, backing the Lowell-GFKL merger – and Ontario Teachers’ Pension Plan. Permira yesterday also spent £1.3bn on buying corporate finance firm Duff & Phelps.
Lowell’s acquisition is expected to close in H1 2018 and to be funded through a combination of new debt issuance and equity. The transaction will create one of the largest credit management service providers in Europe and make Lowell a market leader across the Nordic region.
James Cornell, chief executive of Lowell, said: “Our shared commitment to innovation and best practice for consumers and clients alike, will significantly strengthen our service proposition across the credit management value chain.
“I believe that the combination of our operations and cultures is highly compelling and, together, I am convinced that we can continue to drive growth across one of Europe’s most sophisticated credit markets through our combined expertise and experience.”
Trond Brandsrud, CEO carve-out business, said: “We are excited to welcome our new owners and to become part of Lowell. This means getting an owner with deep expertise and a strong standing within our industry. The combination of the two of us will be extremely compelling.”
The carve-out business comprises Lindorff’s businesses in Denmark, Estonia, Finland and Sweden as well as Intrum Justitia’s business in Norway and has been divested to address potential competition concerns raised by the European Commission following its investigation into the combination between Lindorff and Intrum Justitia. It is a full-service credit management service provider, offering services within debt collection and debt purchase as well as payment and invoicing services with approximately 900 colleagues.
For the last twelve months to September 30 2017 the carve-out business estimated revenues amount to approximately €190m. As of September 30, 2017, the carve-out business had purchased debt portfolios with a book value of approximately €400m.
