Bridgepoint is selling debt purchase and collection agency 1st Credit for up to £350 million (€464.7 million; $689.3 million) having appointed US bank Citi as an advisor, according to a source close to the buyout firm.
The company acts on behalf of lenders to collect debt and it buys non-performing debt portfolios.
The UK buyout firm is set to make a striking return having pursued a buy and build strategy at the company since acquiring it for £72 million in 2004 from UK rival Gresham.
Last year the company made its first non-UK investment buying a 35 percent stake in Spanish debt collection agency Reintegra, which is part-owned by Spanish bank Banco Santander.
Larger buyout firms The Blackstone Group and Permira are reportedly expected to bid for the company, according to UK newspaper Daily Telegraph. The sales comes as further divestments are expected to be made of such businesses by larger corporates, providing buyout firms with possibilities for consolidation in the sector.
The company’s EBITDA was £27.7 million last year and it is forecast to rise to £36 million by the end of this year.
The business had a turnover of £76.8 million last year.
Other firms have enjoyed success in the debt collection sector including Barclays Private Equity, which sold Cabot Financial in April 2006 for £275 million making a three times return over two years.