Lowell acquires Intrum carve out for €730m

Lowell has entered an agreement with fellow European debt buyer Intrum Justitia to acquire a carve-out business operating across Scandinavia

Lowell acquires Intrum carve out for €730m

Lowell has entered an agreement with fellow European debt buyer Intrum Justitia to acquire a carve-out business operating across Scandinavia.

The agreement, secured long after a merger was first announced between Intrum and its competitor Lindorff, means that Lowell will acquire Lindorff’s entire business in Denmark, Estonia, Finland and Sweden as well as Intrum Justitia’s entire business in Norway.

A sale of the business was specified by the European Commission as a condition of the combination of Lindorff and Intrum earlier this year.

The transaction is valued at €730m and will create one of the largest credit management service providers in Europe. Though subject to the European Commission’s approval, as well as regulatory and competition approval, on completion the deal will secure Lowell’s position as a market leader across the Nordic region.

The acquisition is expected to close in the second half of 2018 and will be funded through a combination of new debt issuance and equity.

Announcing the deal, Lowell said the combined business will benefit from greater scale and diversification in terms of broader geographic reach and a more balanced revenue mix.

James Cornell, chief executive of Lowell, said: “I’m pleased to be extending the Lowell family today. 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.

“The combination of our operations and cultures is highly compelling and, together, I am convinced we can continue to drive growth across one of Europe’s most sophisticated credit markets through our combined expertise and experience.”

Trond Brandsrud, chief executive of the 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 Intrum carve out, which has about 900 staff, is a full-service credit management service provider, offering services within debt collection and debt purchase as well as payment and invoicing services.

For the last 12 months to September 30, 2017, the business estimated revenues amount to about €190m. As at September 30, the carve-out business had purchased debt portfolios with a book value of around €400m.