04 Feb

'Link Group acquires servicing firm for €165m in cash' Marcel LeGouais, Credit Strategy

Link Group has acquired Pepper Group’s European loan servicing (PES), asset management and advisory business for an upfront cash payment of €165m.

Announcing the acquisition, Link Group said the meeting of assets under management thresholds and growth milestones could trigger an extra consideration of €35m.

With headquarters in London, PES provides end-to-end loan servicing and asset management across residential and commercial segments, with market positions in the UK, Ireland, Spain, Greece and Cyprus.

The business has around €40bn of assets under management and an established team of about 880 staff delivering an end-to-end debt servicing platform.

Link’s announcement said the acquisition will deliver immediate scale for its banking and credit management (BCM) division, both in existing and new jurisdictions.

Link added that PES’s core characteristics align with BCM’s focus on new lending services and bank outsourcing, as well as performing and non-performing loan management.

The transaction will not impact on services provided to residential or commercial customers serviced by PES whose terms, conditions and contact points all remain the same.

The acquisition is expected to complete in the second half of 2020. Once completed, PES will integrate with Link Group’s BCM business. Combined, the businesses will have around €130bn of assets under management, along with more than 1,800 employees.

Fraser Gemmell, chief executive of Pepper European Servicing, said: “We’re delighted to have completed this deal. It will facilitate ongoing business growth while providing Link Group with the opportunity to accelerate its European growth plans. through the creation of a pan-European multi-asset servicer. This will leverage the combined strengths, experience and capabilities of the Pepper and Link Group platforms.”

Robbie Hughes, chief executive, banking and credit management, at Link Group, said: “In 2019, we set our strategic vision to become the leading independent servicer in Europe with an expanding global footprint.

“This transaction accelerates that vision and will see two high-quality businesses integrated to create a leading pan-European asset servicer and manager, with significant potential for growth in existing and new markets.”

The move towards wider servicing solutions provided by debt purchase and credit management groups will form the background to the Collections & Vulnerability Summit, at The Midland hotel in Manchester, on October 16.

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