Highlights of the transaction
- Transaction amount
The transaction involves over 10,000 portfolios with a nominal value ofSEK 382 billion (EUR 33 billion ) and a book value ofSEK 11.5 billion (EUR 1.0 billion ) as of30 September 2023 . - Intrum proceeds
Expected net cash proceeds ofSEK 8.2 billion (EUR 711 million ) will be paid in full on closing which is expected to take place during the first half of 2024. - Market price of assets
The transaction amount represents approximately 98 percent of the book value as per the economic transfer date of30 September 2023 . - Servicing mandate
Intrum will benefit from a minimum 5-year servicing agreement with the Investor. Servicing fees remain, in all material aspects, unchanged. - Deleveraging
The net expected proceeds ofSEK 8.2 billion will be used, in full, to reduce leverage. Intrum's net debt ofSEK 58.9 billion will decrease toSEK 50.7 billion , pro forma for the transaction. Intrum's net leverage ratio will be 4.6x on RTM cash EBITDA ofSEK 11.0 billion .
Background and rationale
The transaction includes assets in 13 of Intrum's 20 jurisdictions across
Intrum continues to deliver on the near-term measures introduced at the Capital Markets Day ("CMD") in
The increased size and transaction terms demonstrate the attractiveness of Intrum's granular and diversified assets combined with its market-leading servicing capabilities. In addition, the transaction meaningfully reduces absolute debt and near-term refinancing risk whilst growing the company's strong client servicing franchise and increasing the services provided to one of the largest NPL investors in
"This transaction is an important step that will allow us to de-lever our balance sheet, while maintaining exposure to the asset and the full servicing perimeter. The transaction is an important step to a more capital light business model - reduced balance sheet intensity while leveraging our servicing capabilities and increasing our highly valued recurring servicing income. This is also a first meaningful step on our path towards becoming a full-service asset management platform with third party capital majority funding our proprietary origination of consumer NPL asset investments. In Cerberus, a leading investor in the field and one of our largest and most important clients, we have a strong partner going forward."
"Intrum has established itself as a European leader in credit management services, having built a unique and granular asset book over the years. We are pleased to acquire a controlling interest in this sizeable pan-European loan portfolio and help Intrum progress its strategic evolution to a servicing-led business. Aligned with our strategy of partnering with industry-leading businesses around the globe, this marquee transaction marks an important step in our continued collaboration with Intrum."
Preliminary pro forma financials
The completion of the transaction will generate a non-cash accounting loss of SEK approximately 845 million. Of which
Intrum's cash EBITDA is expected to be approximately 20 percent lower in 2024. The net debt will be reduced by approximately
Pro forma for the transaction, Intrum's Q3 2023 leverage ratio stands at 4.6x with proforma cash EBITDA of
As a result of the transaction Intrum has achieved the balance sheet intensity financial target of SEK approximately 30 billion. The impact on Intrum's cash EBITDA is expected to extend the time to meet the leverage target of 3.5x from YE2025 to 2026, although management is actively pursuing alternative measures to regain the accelerated path and meet the leverage ratio target by year-end 2025.
Closing conditions and regulatory approvals
The completion of the transaction is subject to certain technical and customary regulatory conditions and is expected to complete in the first half of 2024.
Advisors
Intrum was advised by Akin and PwC.
Cerberus was advised by
Invitation to conference call
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For further information, please contact:
+46 70 744 69 82
ir@intrum.com
The estimates in this communication are mostly based on Q3 2023 published results with a EUR/SEK exchange rate of 11.53.
This information is information that
About
Founded in 1992, Cerberus is a global leader in alternative investing with approximately
Intrum is the industry-leading provider of Credit Management Services with a presence in 20 markets in
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