Two European ARM Giants Announce Big Portfolio Buys

Two of the largest players in the European accounts receivable management market--Intrum Justitia and Aktiv Kapital--separately have recently announced large debt portfolio purchases. One of the purchases prompted a new office opening in Spain.

Stockholm, Sweden-based debt purchaser/collector Intrum Justitia said Monday that it had purchased a $921 million portfolio in Austria from Bank Austria Creditanstalt. Two thirds of the portfolio consists of nonperforming bank loans with an average balance of about $20,000, while one third is comprised of bank loans granted against collateral in the form of real estate property or a real estate share.

Anders Antonsson, communications director for Intrum, told insideARM.com in an email that the average account balance is atypically high because the portfolio includes more commercial debt than Intrum usually buys. "Our niche is unsecured consumer loans with a relatively low average value," Antonsson wrote. "But lately we have purchased more [commercial] bank and credit card debts, hence we have seen an increase in average value prior to this Austrian acquisition as well."

Intrum partnered with French investment bank Calyon S.A. on the deal. Intrum said that the purchase price of the portfolio was about $140 million, with Calyon contributing roughly $90 million of the purchase price and Intrum fronting the remaining $50 million. Antonsson noted that Intrum typically earmarks around $77 million for portfolio purchases in a year but that it will also partner with investment banks on one additional large purchase each year, usually targeting a specific country. Intrum has a relationship with U.S.-based Goldman Sachs for many of the large portfolio buys but partnered with Calyon on this year's major purchase in Austria.

Intrum Justitia has previously worked with Calyon on purchases of bank portfolios in the Nordic countries. Intrum has also gained experience from several other Nordic portfolios containing collateral in the form of real estate properties, while Calyon is a leading investor in mortgage backed debts in other European countries.

Intrum is one of Europe’s largest ARM companies with yearly revenues of around $440 million and 2,900 employees in 24 countries.

Olso, Norway-based Aktiv Kapital also said late Friday that it had purchased a large debt portfolio. The debt purchaser and collector said that it bought 800,000 telecom accounts with a face value of around $288 million from Spain’s Telefonica Group.

Aktiv said that in conjunction with the purchase, the group will be opening a new call center in Barcelona, Spain in January that will employ some 60 people. So far this year Aktiv has spent more than $180 million on portfolio purchases with more coming by year’s end, according to a company press release.

Aktiv Kapital is also one of Europe’s largest ARM players with $263 million in revenue in 2006 and more than 1,200 employees in 12 countries.