Europe’s largest debt collector announced plans to make more acquisitions as it looks to build its presence in credit management services.
Intrum Justitia AB conducted an analysis that indicated approximately one-third of European businesses saw their survival at risk as recently as 2013 because of problems collecting debts. That year, companies in the region charged off approximately $382 billion (350 billion euros) in unpaid invoices.
Demand for debt collection services is clearly growing, company officials said. Acting CEO Erik Forsberg wants to acquire two or more companies on average in the next few years, he said. In May, Lars Wollung, who was the CEO at the time, had set the takeover target at two smaller companies a year, on average, over five years.
"The ambition is clear: we should in comparison to the last few years improve our acquisition pace for small and mid-sized CMS companies,” Forsberg said at Intrum’s headquarters in Stockholm, according to a Bloomberg News report. "Preferably we’d like to do many smaller acquisitions, simply because that reduces risks."
Intrum plans to grow by continuing to purchase debt and expanding its CMS business, both organically and through acquisitions, he said. It has some $353 million in credit facilities it can use for deals and can raise additional funds in the bond market.
While some corners of the purchased debt market have become more competitive, making the environment "a bit more challenging," Intrum is still “comfortable with reaching our financial targets - we are very committed to reaching the 10% EPS growth," Forsberg said.
Intrum’s board discharged Wollung last month amid "differing views on the future course for the company." Its recruitment process is "focused on the earliest possible appointment of a permanent CEO." Under Wollung, Intrum’s share price more than quadrupled. Forsberg said the change in management won’t alter the company’s direction.