Lowell to acquire Hoist Finance

13th April 2022

European credit management services provider, Lowell has announced that will acquire Hoist Finance.

The transaction includes the operations of Hoist Finance UK and its entire unsecured non-performing loan portfolio, comprising of over 2 million consumer accounts, almost exclusively in the credit card and personal loan sector.

The transaction includes the operations of Hoist Finance UK and its entire unsecured non-performing loan portfolio, comprising over 2 million consumer accounts, with approximately £585m estimated Remaining Collections as of December 2021.

The loan portfolio is almost exclusively in the credit card and personal loan sector. The acquisition continues Lowell’s growth trajectory as well as delivering targeted, strategic expansion into the UK financial services sector, specifically banking.

Lowell will also benefit from improved data insight from the financial services market, materially speeding up pricing and analysis whilst reducing investment risk. The transaction is valued at £370 millon on an enterprise value basis as at 31st December 2021 which accounts for £340 million of net debt.

Completion is subject to the approval of the Financial Conduct Authority and is expected Q3 2022. Lowell expects to maintain leverage within its guided range of 3.5-4.0x upon completion of the transaction.

John Pears, UK CEO of Lowell, said “This transaction is another big step in our UK story, another springboard for our growth. We are not only expanding our customer base and our expertise in Financial Services, we are also adding a massive amount of insight and data to our operations. Alongside welcoming new team members and sector experience, this is a transformational deal for Lowell in the UK, cementing us as an industry leader.”

Colin Storrar, Lowell Group CEO, said “Hoist Finance is a strong UK market player and its platform, experience, data and portfolio will bring much added value to the Lowell Group. This transaction also demonstrates our ambition, cementing our place as one of the largest UK and European credit services providers across all principal sectors. This is a continuation of our growth trajectory and supports the delivery of the strategic goals we set ourselves.”

Lowell has also announces the issuance of the first European Rated Loan ABS. The new securitisation, via Wolf Receivables Financing Plc, comprises 357,000 reperforming customer accounts with c£180m 120m ERC. The securitisation will raise proceeds of £100 million via the issuance of Senior Notes at a coupon of S+325bps. Lowell will initially hold 100% of the Junior Notes and will continue to service the securitisation. Lowell’s core strength is to work with consumers to generate affordable and sustainable payment arrangements. This new securitisation is a clear demonstration of Lowell’s strength in rehabilitating consumer accounts from non-paying to generating stable reperforming cash flows which support investment-grade ABS senior notes.

The acquisition of Hoist Finance UK will be funded via a combination of proceeds from the new securitisation, strong operating cash flow and existing committed funding sources. Jamie Wilson, Lowell Chief Financial Officer, said “These two transactions deliver against our stated goals, continuing to grow our business and diversify our revenues and balance sheet. It builds sustainability into the business and positions us for future growth. It is always good to have established a new product in the process and we have shown with the ABS that we continue to innovate and further diversify our sources of funding.”