Debt buyer Encore Capital Group Inc. announced Tuesday the acquisitions of two companies in separate transactions in the United Kingdom and Latin America. Terms of both deals were not disclosed.
Encore has taken a controlling stake - 51 percent - in Refinancia, a debt buyer in Colombia and Peru. The deal builds Encore's presence in countries that, combined, have nearly 80 million residents. Refinancia services distressed consumer debt, which it sometimes purchases or services for other firms. It also has a small credit card business in Colombia.
The transaction opens up two new markets inhere Encore can deploy capital at higher returns than what's available in the U.S., according to Ken Vecchione, Encore's CEO. In addition, Encore now has a beachhead in Latin America from which to expand, both geographically and into new specialty financial products designed for underserved consumers.
Encore has been deploying capital through Refinancia since late 2012 and will continue doing so.
Encore also entered into an agreement to take a controlling stake in Grove Capital Management, an investment group that buys credit portfolios and has a focus on UK insolvencies and Spanish assets. The deal is subject to regulatory approval and is expected to close no later than early in the second quarter.
The Grove Capital purchase will build Encores presence in the UK. Groves largest business is the purchase and management of insolvencies, primarily individual voluntary arrangements and bankruptcy receivables.
The two acquisitions continue an international expansion shift among large U.S. debt buyers. Encore in February announced a $481 million deal with Marlin Financial Services and a $192 million deal with Cabot Credit Management.
Last week, debt buyer Portfolio Recovery Associates agreed to acquire Aktiv Kapital AS, an Oslo Norway-based accounts receivable management company in one of the largest deals in accounts receivable management history.