European ARM Giant Intrum Justitia Announces Major Moves

In the last few days, accounts receivable management firm Intrum Justitia announced that it has acquired previously joint-owned purchased debt portfolios from Goldman Sachs and divested operations in Scotland, furthering the withdraw from that northern UK market.

Since 2003, Sweden-based Intrum Justitia has successfully co-operated with Goldman Sachs in purchasing large written off debt portfolios through two joint venture companies. The co-operation has resulted in investments in Germany, Spain and the UK.

Intrum announced Wednesday that it has acquired Goldman Sachs’ share in the joint venture. The portfolios hold over 300,000 accounts with a gross collection value of more than EUR 2,000 million ($2.8 billion).

The company said that the joint venture parties reviewed and analyzed the jointly owned portfolios to conclude that they have reached a size for which joint funding and investor management was no longer needed

Intrum President and Chief Executive Officer Lars Wollung said, “We are pleased to have come to an agreement on this buy-out on terms that are representative for current market conditions. The acquisition strengthens our ability to reach the Purchased Debt investment level guidance of SEK 700 million ($91 million).”

Intrum also announced Thursday that it has sold its share in a Scottish limited liability partnership, Stirling Park LLP, effectively withdrawing from the Scottish market. In connection with the withdrawal, Intrum Justitia will receive a repayment of its capital account totaling $1 million.

Stirling Park LLP represented approximately 1.4 per cent of the Intrum’s total revenue in 2008. The transaction will result in a loss around $1.8 million for the Group, which will be charged to the June 2009 accounts.

“We are taking this step in order to continue to streamline our UK operations,” said Wollung.

Intrum is hosting a Capital Markets Day in London Thursday which will include in-depth presentations of the status of the UK operations and on the acquisitions in France in late 2008. A close look will be taken at the Purchased Debt market and Intrum Justitia’s strategy for Purchased Debt operations in the present economic cycle. A Webcast can be accessed at www.intrum.com.

Intrum Justitia is a debt purchase and collection firm that employs 3,400 employees in 24 markets and has revenues of approximately $480 million.