Electra Partners Europe, the European private equity house, is considering plans to for a flotation of Premium Credit, the UK-based speciality finance group.
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Electra has hired investment bank Lexicon Partners to advise on plans for an exit of the business, with a stock market listing the preferred exit. Lexicon, which confirmed that it has been hired to look at disposal options for the business, was unavailable for comment.
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Sharon Beckett, managing director of Premium Credit, sent a letter to its brokers in July, informing of Electra’s plans to sell or float the businessat Premium Finance. According to Beckett, Electra has received a number of approaches for the business.
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In 1996 Electra backed a £230m management buyout of Vendcrown, the holding company of Premium Credit, acquiring the business from HSBC. Electra Investment Trust invested £16.1m for a 33 per cent stake in the business. Other funds managed by Electra Fleming invested £5.4m for an eleven per cent stake.
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Premium Credit is a UK-based provider of short-term installment finance. The company finances commercial insurance premiums, personal insurance premiums and non-insurance services including golf and leisure club memberships, audit fees and school fees. The business, based in Epsom, Surrey, was established by HSBC in 1988.
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In the year to 31 December 2002 the company generated £1.8bn of gross advances. Its revenues were £65.8m and the profit after tax was £21.6m (2001: £11.3m).
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If Electra opts for a listing, it will follow in the footsteps of Apax Partners and Hicks Muse, which successfully completed a stock market listing of UK directories business Yell Group last month, valuing the business at £1.14bn. The Yell offering was five times oversubscribed, suggesting that there is an appetite in the public markets for successful, growth businesses.
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Electra Partners, which was formed following a management buyout from Electra Investment Trust in November 1999, is currently investing from its E1bn debut fund which held a final close in April 2001.