UK Debt Purchaser to be Acquired for Around $125 million

THREE founders of a consumer debt company are set to become multimillionaires through the £70 million sale of their firm to a venture capitalist, according to an article in the Times Online.

Mike Cleary, who once ran the in-house debt collection team at BT Group, Najib Nathoo, the former head of risk management at GE Capital, and Charles Holland will see their stakes in First Credit valued at about £5 million each when the business is sold to Bridgepoint.

First Credit, which has close to £1 billion ($1.78 billion) of debt on its books, has exploited the surge in consumer borrowing, which saw domestic debt break through £1 trillion in July. It buys debt from banks and other companies and attempts to retrieve the cash.

Owen Clarke, of Barclays Private Equity, owner of Cabot Financial, a rival to First Credit, said: ?Until a few years ago, companies would hire debt collection agencies to retrieve debts for a fee. This new generation of companies buy the debt from the companies, typically for between 1p and 20p in the pound.?

Bridgepoint is in exclusive discussions to buy First Credit from Gresham Private Equity, owner of 52 per cent of the company. The three founders of First Credit, who will remain with the firm, are expected to reinvest more than half of their stakes in the company after it is sold.