Bridgepoint sells 1st Credit to Intrum Justitia for £130m

The valuation falls well below the £350m figure Bridgepoint was reportedly seeking for the company when it explored a potential exit in July 2008. At the time, unquote” reported Warburg Pincus, BC Partners and Bain Capital had all made bids for 1st Credit that fell below that valuation.

A Bridgepoint spokesperson declined to comment on the returns generated, though unquote" has learned the GP held a large majority stake in the business.

Under Bridgepoint’s tenure, the business has grown through the purchase of debt portfolios from banks, utility suppliers and telecoms companies. Its portfolio purchases grew 32% to £42m in the year to April 2015, with collections increasing 18% to £50m in the following financial year.

Since Bridgepoint’s initial investment, the company’s headcount has also grown from 100 employees to 130.

The business undertook a refinancing in May 2013, raising a total of £120m from a combination of bonds and bank debt. The deal enabled the company to repay historic debt and provided it with £45m of liquidity for new portfolio purchases.

The transaction is intended to increase the acquirer’s presence in the UK market, and enable 1st Credit to make efficiency savings. Intrum Justitia most recently acquired Portuguese company Logicomer Gestão e Recuperação de Créditos in Q4 2015.

The acquirer’s UK operations will be led by 1st Credit chairperson Leith Robertson and CEO Eddie Nott.

The deal is expected to complete in Q1 2017.

Previous funding
1st Credit initially received private equity funding in January 2002, when it raised £4m from Gresham Private Equity as part of a £15m first round of financing. In October of the following year, Gresham provided a further £20m, with Barclays providing a debt facility to support the deal.

Bridgepoint then provided £67m as part of the £128m management buyout of the company in October 2004. Barclays once again provided senior debt facilities, while Intermediate Capital provided mezzanine finance for the transaction.

Company
Founded in 2001, Reigate-headquartered 1st Credit is a debt collection company. It acquires debt portfolios from banks, utility suppliers and telecoms companies and enters into long-term repayment agreements with consumers.

1st Credit has a headcount of 130. The business has arrangements of around £300m and generated revenues of £50.1m in 2015, with EBITDA of £33.2m.

People
1st Credit – Leith Robertson (chairperson); Eddie Nott (CEO).
Intrum Justitia – Mikael Ericson (president, CEO).

Advisers
Vendor – Travers Smith, Edmund Reed, Laura Pembridge, Geraint Steyn, Robert Coward, Simon Skinner, Andrew Callaghan, Amie McFadzean (legal, tax).
Acquirer – Baker & McKenzie (legal).

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