Europe's Largest Debt Collector Announces Aggressive Growth Plans

Intrum Justitia AB, Europe’s largest debt collector, announced this week plans to grow through acquisitions in the coming years. The acquisition strategy is designed to increase the company’s presence in Credit Management Services (CMS).

Intrum Justitia offers comprehensive services, including purchase of receivables, designed to measurably improve clients’ cash flows and long-term profitability. Founded in 1923, Intrum Justitia has some 3,600 employees in 20 markets. Consolidated revenues amounted to almost SEK 5.2.6 billion (approximately $616 million in U.S. Dollars) in 2014. Intrum Justitia AB has been listed on NASDAQ OMX Stockholm since 2002.

The company wants to do “at least two, or more, acquisitions, on average over a few years,” said acting Chief Executive Officer Erik Forsberg in his first full interview since taking over the position from Lars Wollung on Nov. 2 of this year. Earlier, in May, Wollung had set the takeover target at two smaller companies a year, on average, over five years.

Per an article article in Bloomberg Business, “Intrum will grow by continuing to purchase debt and expanding its CMS business, both organically and through acquisitions, Forsberg said. It has some 3 billion kronor ($353 million) in credit facilities it can use for deals. The company can also raise additional funds in the bond market, he said. Intrum is interested in buying companies with annual revenue as high as 250 million kronor, or an equivalent enterprise value, Forsberg said. It would consider deals in all its 20 markets, he said.”

The company also announced today that it had renegotiated its revolving credit facility with Nordea and Swedbank, in order to improve the group’s financial flexibility.

insideARM Perspective 

This is positive news for the company in spite of recent instability in senior management. Intrum’s board discharged Wollung last month amid “differing views on the future course for the company.”  Yet, Forsberg’s comments on future acquisition seem quite consistent with comments from the former CEO last May.  Its recruitment process is “focused on the earliest possible appointment of a permanent CEO.” Under Wollung, the company’s share price had increased significantly.