Intrum Justitia has entered into an agreement to acquire 1st Credit, a mid-sized purchased debt company in the United Kingdom. The purchase price on a cash and debt free basis is about £130 million, attributable to a diversified portfolio of receivables, deriving from investments from several sellers in the financial industry. 1st Credit generated earnings before interest, tax, depreciations and amortizations on purchased debt of about £33 million in 2015.
1st Credit has a strong operation for collection of financial receivables, with about 130 employees mainly involved in the collection of its purchased debt portfolios. It is one of few companies in the UK that are regularly invited to most of the panels where banks and financial companies invite selected buyers to purchase portfolios. 1st Credit has invested successfully to adapt to increased regulation in the UK market and it has received several awards as the most compliant debt collection company in the industry.
Mikael Ericson, President and CEO of Intrum Justitia AB said “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,”
The acquisition is expected to be completed during the first quarter of 2017 and it is estimated to be accretive to Intrum Justitia’s earnings per share from then. 1st Credit will be a part of Intrum Justitia’s Central Europe region.