Feb 19 U.S.-based Portfolio Recovery Associates
Inc, which provides fee-based debt collection services,
said it would buy Norway's Aktiv Kapital AS for about $880
million to expand its debt collection services in Europe.
Portfolio Recovery's shares rose 5 percent in extended
trading after the company also reported a higher-than-expected
rise in fourth quarter profit.
The combined entity will be one of the world's largest
acquirers of non-performing consumer debt from banks and other
creditors, with more than $4.6 billion in estimated remaining
collections from customers, Portfolio Recovery said in a
The company, which estimated $2.7 billion in remaining
collections from its customers in 2013, said it would also
assume Aktiv's debt of $435 million, giving the deal an
enterprise value of $1.3 billion.
Portfolio Recovery said it would finance the deal with a
combination of cash, $170 million of seller financing and $649
million from its credit facility.
The company said it expected the deal to immediately add to
earnings and estimated cost totaling about $15 million over the
first and second quarter.
Aktiv's Chief Executive Geir Olsen and the more than 400 of
the company's employees will join Portfolio Recovery when the
deal closes, which is expected in second quarter.
Net income attributable to Portfolio Recovery rose 28
percent to $45.8 million, or 91 cents per share, in the quarter
ended Dec. 31.
That was higher than the 90 cents per share analysts' on
average were expecting the company to earn, according to Thomson
Cash collections rose 22 percent to $278.9 million in the
quarter, while total revenue rose 20 percent to $184.9 million.
Deutsche Bank Securities Inc acted as adviser to Portfolio
Recovery while William Blair advised Aktiv Kapital.
Portfolio Recovery shares were trading at $53.00 in extended
trading after closing at $50.48 Wednesday on the Nasdaq.