Intrum has announced that has reached an agreement with Piraeus Bank to acquire it’s Recovery Management Services platform; Recovery Banking Unit. The Unit will be hived-down into a separate legal entity, valued at €410m, which will be fully consolidated by Intrum. Intrum will acquire 80 per cent of the shares in the new company corresponding to a purchase price of €328m of which only €296m is paid in cash on closing of the transaction with the remainder planned after year end 2022. The NewCo is based on a long-term strategic partnership with the bank owning the remaining 20 per cent of the shares.
Mikael Ericson, President and CEO of Intrum said “The acquisition is in line with our strategy and represents a significant strategic step for Intrum further into Greece. The Greek market has been a high priority for us but given the challenges associated with a relatively under-developed market, despite the very large volumes of debt, it was crucial for us to find and work in a transparent, bilateral way with a constructive partner. We found this partner in Piraeus Bank.”
“This partnership represents another significant step in the journey towards our 2020 targets, driving step change in growth and delivering strong cash flows contributing to our deleverage goals. It is a significant portion of Intrum’s planned M&A in 2019, and we will naturally rebalance the investment agenda for the remainder of the year.”
Intrum said that the deal puts Intrum in a leading position on one of the largest markets for non-performing loans in Europe, which creates strong growth opportunities going forward. The Greek market is improving and as the leading European credit management company, Intrum has again demonstrated that the company can work with the largest financial institutions to address the challenges presented by their non-performing exposures.