JC Flowers sells down Cabot stake

Just weeks after paying fellow private equity firm AnaCap £800m for the UK debt business, JC Flowers has sold a majority stake for £128m to Encore Capital.

Encore Capital Group, a US-based debt management firm, will become the latest majority owner of Cabot Credit Management, a UK debt business that was just recently purchased by JC Flowers. 

JC Flowers bought Cabot from fellow private equity firm AnaCap Financial Partners earlier this month for £800 million. It's now selling a controlling stake for approximately £128 million. The transaction is expected to close in the third quarter.

Encore decided to partner with JC Flowers on the deal several months ago but had been unable to finalise its arrangement with the private equity firm before bids on Cabot were due on 15 May. At that point, JC Flowers went forward with the deal without Encore.

“Now that our deal with JCF has been finalised, we will be purchasing 50.1 percent of their stake,” said Encore’s chief financial officer Paul Grinberg in a presentation detailing the transaction. “Looking ahead, we have created a mechanism to acquire the remaining ownership interest in the company between four and six years.”

Until then, the company will be owned jointly by Encore, JC Flowers and Cabot management, Grinberg said. Encore holds six of the company’s 10 board seats.

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