- Credit Corp Group has acquired Baycorp Holdings from Encore Capital Group for $65 million
- The acquisition significantly improves Credit Corp’s current year earnings outlook
- Credit corp said this acquisition will increase the purchased debt ledger investment guidance from $300 million to $320 million
Credit Corp Group has acquired Baycorp Holdings from Encore Capital Group for $65 million.
Baycorp is a large and well-established debt purchasing and debt collection operator across Australia and New Zealand.
Credit Corp is Australia’s largest debt buyer and collector. It is committed to providing sustainable financial solutions, like longer-term repayment plans, with the goal to improve its customers’ financial situations.
The merger of the acquired businesses will be required in to order to deliver pro-forma returns.
The acquisition significantly improves Credit Corp’s current year earnings outlook.
The deal will produce earnings growth in the Australian and New Zealand debt buying business to complement strong growth from the company’s US debt buying and consumer lending segments.
The revised earning will grow for 2020 in Net Profit and Tax of 15 per cent to 18 per cent.
Credit corp said this acquisition will increase the purchased debt ledger investment guidance from $300 million to $320 million.
Funds for the agreement came from Credit Corp’s committed and undrawn bank debt facility. It still maintains debt headroom of $165 million.
Credit Corp CEO Thomas Beregi is pleased with the deal.
“We expect to achieve our targeted investment return on the PDL component of the transaction and see opportunity to scale up our existing agency activities,” he said.
Credit Corp said for the New Zealand agency business will be preserved and improved and for the Australian agency operation will be restructured to ensure that it operates sustainably.
Credit Corp is up 13.3 per cent today and is currently selling at $27.27