Debt buyer Portfolio Recovery Associates (PRA) Inc. has completed its acquisition of Aktiv Kapital AS, an Oslo, Norway-based accounts receivable management company. The deal is one of the largest in accounts receivable management history.
Terms of the approximately $880 million acquisition required PRA to assume approximately $435 million of its corporate debt, putting the total enterprise value for the deal at $1.3 billion.
The combined companies, effective Wednesday, will be called PRA Group, signaling to investors and global debt sellers that PRA plans for international growth from a group of companies across various countries, company officials said.
The companies combined become 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. Aktiv Kapital specialized in buying and servicing non-performing loans in Europe and Canada. PRA, based in Norfolk, Va., operates in the U.S. and U.K.
PRA also has completed its acquisition of Pamplona Capital Management's Individual Voluntary Arrangements Master Servicing Platform and other operating assets in the U.K., expanding PRA's ability to offer debt buying solutions to global clients across a variety of their defaulted customer accounts, company officials said.
"Leading banks and other creditors in Europe and Canada see value in a well-capitalized buyer of non-performing debt with a strong brand and reputation for compliance, able to purchase substantial portfolios on a regular basis," said Steve Fredrickson, chairman, president and CEO, PRA Group. "We plan to leverage unique technology, data analytics and more than 20 years of experience in multiple countries, regions and cultures for the benefit of global banks, creditors, their customers and our shareholders."
In Europe and Canada, customers will still see the familiar Aktiv Kapital name. In the U.S. and U.K., customers will continue to interact with Portfolio Recovery Associates, according to the company. PRA will continue to provide contingency collection services to its existing U.K. clients in the financial services, retail, telecom and utility industries.
PRA has named Geir Olsen, CEO and board member of Aktiv Kapital, as CEO of PRA Group Europe, which includes all of Aktiv Kapital's European operations and PRA's existing operations in the U.K. His management team and staff from Aktiv Kapital Europe and PRA UK's management team and staff will report to Olsen.
Pamplona's Andrew Berardi has been named managing director - UK, Insolvency Investment Services at PRA Group. His team of six people from Pamplona's U.K. IVA business also has joined PRA. IVAs are a formal alternative for U.K. consumers to primarily avoid bankruptcy. PRA's global Bankruptcy Services business also has been renamed Insolvency Investment Services effective Wednesday.
PRA will further discuss its acquisitions in Europe as the company exits its current quiet period upon announcing second quarter results after market close on August 5.