Bridgepoint buys 1st Credit in secondary MBO

Bridgepoint has purchased a majority stake in debt collection agency 1st Credit from UK private equity house Gresham.

Pan-European buyout house Bridgepoint has purchased a majority stake in 1st Credit, previously backed by Gresham, following a select auction. It paid £72 million (€104 million; $132 million) for the equity. Barclays provided senior debt for the deal, and Intermediate Capital Group provided mezzanine finance.
 
1st Credit specialises in purchasing uncollected consumer debt from lenders at a discount to face value. It was launched in 2001 by CEO Mike Cleary, whose previous debt collection agency CCI was also backed by Gresham until it was bought out by Equifax in 1998.
 
Gresham initially invested £5 million in 1st Credit in January 2002, and raised its investment to £10 million following a second round of funding in October 2003. The company has increased its revenue by 400 percent over the last 18 months, and now has more than 100 employees and turnover of £30 million. Cleary said that the company is hoping to use Bridgepoint's European network to aid international acquisitions.
 
Gresham was advised on the transaction by UK-based law firm DLA and accountants Deloitte and Touche, who recommended the sale following a strategic review of the firm's assets. Bridgepoint was advised by PricewaterhouseCoopers (corporate finance), Deloitte (due diligence), and Travers Smith Braithwaite (legal).
 
Gresham undertook its own buyout from Zurich Financial Services in February 2003. It has offices in London, Birmingham and Manchester, and specialises in investing in mid-market companies. Other recent exits include the listing of office2office on the London Stock Exchange, and the sale of Dimensions Holdings to Johnson Service Group.
 
Bridgepoint has seven offices in Western Europe, and has invested in over 150 European businesses in the last ten years. Recent deals include its acquisition of Austrian car part manufacturer Forstinger and the sale of UK independent wine distributor Western Wines.