Nordic Capital Fund VIII, currently the indirect majority shareholder in Lindorff, notified the European Commission of the intended combination of Intrum Justitia and Lindorff.
Based on its initial investigation, the European Commission has informed the parties of potential competition concerns in five Nordic/Baltic markets, relating to both debt collection and debt purchasing in each market. The parties have therefore proposed a divestment of Lindorff’s entire business in Denmark, Estonia, Finland and Sweden as well as Intrum Justitia’s entire business in Norway. In Sweden, Denmark, Norway and Finland, the units proposed to be divested are smaller than the units that will remain in the combined group. The European Commission will now assess whether the divestment of the proposed units will address its concerns, and this assessment may include a market test. We expect a final decision from the European Commission no later than June 12.
The combined group would have pro-forma earnings (EBITDA, excluding impact of synergies and non-recurring items) of approximately SEK 5.0 billion for 2016, of which an estimated 12%-13% derives from the five units proposed to be divested. The combination of Intrum Justitia and Lindorff has been estimated to result in total annual cost synergies in 3-4 years of approximately SEK 800 million. The five units proposed to be divested account for an estimated 30% of the estimated total cost synergies. In line with earlier communication, the combination of Intrum Justitia and Lindorff is also expected to result in revenue synergies, which are not included in the SEK 800 million cost synergy estimate. The units proposed to be divested together have approximately 850 employees.