News

LAUNCH OF GARFUNKELUX HOLDCO 3 S.A.’S OFFERING OF SENIOR SECURED FLOATING RATE NOTES DUE 2021

Lowell GFKL Group (“Lowell GFKL”), a European leader in credit receivables management, announced today that Garfunkelux Holdco 3 S.A. (the “Issuer”) intends to launch an offering (the “Offering”) of €230.0 million in aggregate principal amount of senior secured floating rate notes due 2021 (the “Notes”) as part of the financing for the previously announced proposed acquisition of Tesch Inkasso Group (the “Acquisition”). Consummation of the Acquisition is subject to receipt of certain regulatory approvals. Pending consummation of the Acquisition, the gross proceeds from the Offering will be deposited into an escrow account in the name of the Issuer, which will be pledged in favour of the trustee on behalf of the holders of Notes. The release of the escrowed proceeds will be subject to the satisfaction of certain conditions. If the Acquisition is not consummated on or prior to 20 February, 2017, the Issuer will be required to redeem the Notes at their initial issue price. Upon release from escrow, the proceeds from the Offering will be used to finance the Acquisition, repay certain outstanding indebtedness under Lowell GFKL’s revolving credit facility and pay related costs, fees and expenses, and for general corporate purposes. There can be no assurance that the Acquisition, the Offering or other financing transactions will be completed.

 

For further information, please contact:

Investor Relations enquiries:

Jon Trott, Head of Investor Relations

Telephone: +44 7551 153 793

Email: investors@garfunkelux.com

 

Cautionary Statement

This press release is for information purposes only and does not constitute a prospectus or any offer to sell or the solicitation of an offer to buy any security in the United States of America or in any other jurisdiction. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes will be offered in a private offering exempt from the registration requirements of the Securities Act and will accordingly be offered only to (i) qualified institutional buyers pursuant to Rule 144A under the Securities Act, (ii) certain persons outside the United States in compliance with Regulation S under the Securities Act and (iii) Qualified Purchasers (as defined in Section 2(a)(51)(A) of the Investment Company Act).  No indebtedness incurred in connection with any other financing transactions will be registered under the Securities Act.

This announcement does not constitute and shall not, in any circumstances, constitute a public offering nor an invitation to the public in connection with any offer within the meaning of the Directive 2010/73/EU of the Parliament and Council of November 4, 2003 as implemented by the Member States of the European Economic Area (the “Prospectus Directive”). The offer and sale of the Notes will be made pursuant to an exemption under the Prospectus Directive, as implemented in Member States of the European Economic Area, from the requirement to produce a prospectus for offers of securities.

Forward Looking Statements

This press release may include “forward looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements can be identified by the use of forward looking terminology, including the terms ‘‘believes,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘expects,’’ ‘‘intends,’’ ‘‘may,’’ ‘‘will’’ or ‘‘should’’ or, in each case, their negative, or other variations or comparable terminology. These forward looking statements include all matters that are not historical facts and include statements regarding Lowell GFKL or its affiliates’ intentions, beliefs or current expectations concerning, among other things, the Offering, the Acquisition, Lowell GFKL or its affiliates’ results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward looking statements are not guarantees of future performance and that Lowell GFKL or its affiliates’ actual results of operations, financial condition and liquidity, and the development of the industry in which they operate may differ materially from those made in or suggested by the forward looking statements contained in this press release. In addition, even if Lowell GFKL or its affiliates’ results of operations, financial condition and liquidity, and the development of the industry in which Lowell GFKL operate are consistent with the forward looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. Given these risks and uncertainties, you should not rely on forward looking statements as a prediction of actual results.

Lowell GFKL Group acquires leading German third party collections company Tesch Inkasso strengthening its position in a core market.

Lowell GFKL Group, a European leader in credit receivables management backed by the Permira Funds and Ontario Teachers’ Pension Plan, today announces that it has entered into an agreement to acquire Tesch Inkasso Group from Avedon Capital Partners and the other existing shareholders. Closing is subject to certain regulatory approvals.

After acquiring Austrian IS Inkasso Service in April, this is Lowell GFKL Group’s second acquisition since its formation in October 2015. This complementary addition strengthens the Group’s position in its core German market. It underlines the Group’s ambition to build a pan-European business with leadership positions in each of its markets. The transaction further improves diversification in terms of addressed verticals and business mix. It will deliver a range of synergies to the enlarged Group.

Tesch Inkasso is a leading German 3PC company with several thousand unique clients and a volume of receivables serviced of c. €2 billion. Founded in 1985, it was acquired by Avedon Capital Partners in 2012 and has itself acquired Transcom CMS and Mediafinanz in recent years.

Lowell GFKL Group is considering various forms of financing to fund the transaction including loans and debt securities.

Tesch Inkasso has a leading position in the utilities and eCommerce sectors and has complementary expertise to the Lowell GFKL Group in many other sectors. It shares the Group’s commitment to building long-term client relationships and respectful, fair engagement with consumers. The CEO of Tesch Inkasso, Thomas Dold, will join the Group having delivered strong organic growth and an impressive new client win rate over the past few years.

Thomas Dold, CEO Tesch Inkasso, said: “I am delighted that Tesch Inkasso will join forces with the Lowell GFKL Group and I look forward to combining our areas of expertise to drive growth in the attractive German market.”

James Cornell, CEO Lowell GFKL Group, said: “I’m very pleased to welcome Thomas and the team at Tesch Inkasso to our Group. This combination significantly strengthens our collective position in Germany and, together with our pioneering approach to consumer insight, gives us the platform to serve even more clients and consumers with our products and services, which span the credit management value chain.”

 

 

Investor Relations contact:

Jon Trott

Telephone:    44 7551 153 793

Email:             investors@garfunkelux.com

 

Media contacts:

UK:

Lisa Caswell

Telephone: + 44 7393 236925

Email: MediaEnquiries@lowellgroup.co.uk

Germany:

Michaela Heitkemper

Telephone : + 49 201 102 1198

Email:  pr@gfkl.com

 

Notes to Editors:

About Lowell GFKL

The Lowell GFKL Group was created in October 2015 following the merger of German and UK market leaders GFKL and the Lowell Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP).

The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector.

http://investors.garfunkelux.com

https://www.gfkl.com

http://www.lowellgroup.co.uk/

 

About Tesch Inkasso

Tesch Inkasso was founded in 1985 by Siegward Tesch, has around 400 colleagues and is based in Gummersbach, Germany – in proximity to the GFKL headquarters in Essen. The company was acquired in 2012 by Avedon Capital Partners, the Dutch-German mid-market PE firm. Within 3PC, the business is a market leader in Utilities and has a strong presence in the Insurance, Financial Services, eCommerce, Telco, Travel and Public sectors.

Recently the business has moved into Debt Purchasing (DP) through proprietary portfolio acquisitions from its existing asset base. Avedon Capital Partners has pursued a market consolidation strategy with recent acquisitions including Transcom CMS and Mediafinanz.

www.tesch-gruppe.com

LOWELL GFKL GROUP ANNOUNCES IMPRESSIVE TRADING PERFORMANCE DURING SECOND QUARTER 2016

Lowell GFKL Group, a European leader in credit receivables management, today announces impressive results for its second quarter ended 30 June 2016.
Financial Highlights

  • Q2 cash EBITDA* increased by 19% year on year to £60m
  • NPL portfolio acquisitions up 27% to £247m in the last 12 months – well diversified across originating verticals
  • 120 month gross Estimated Remaining Collections (ERC) at a record £1.5bn, up 20% from June 2015 and up 11% since Q4 2015
  • In excess of £175m of portfolio acquisitions already closed and contractually committed for 2016
  • Long-term forward flow agreements signed in H1 give visibility of in excess of £320m spend out to FY-21
  • Pricing and collections performance in line with underwriting and model assumptions

*Cash EBITDA as quoted is defined as Garfunkelux Holdco 2 S.A.’s operating profit excluding exceptional items, depreciation and amortization, and adjusted for acquired debt portfolio write ups and amortization amounts as reflected in the unaudited consolidated statement of financial position for Garfunkelux Holdco 2 S.A.

Operational Highlights

  • Acquisition of IS Inkasso Service successfully completed in May
  • Integration of Lowell, GFKL and IS Inkasso Service continues to make good progress
  • Focus on value creation remains paramount:
  • o Sharing best practice to increase competitiveness
  • o Building a strong platform for future Pan-European expansion
  • o Maintaining a disciplined approach to pricing and investment
  • Extension of our value proposition to clients continues through the development of our one stop shop offering
  • Compliance with the regulatory environment and the customer experience remain at the forefront of all activities

Outlook

The outlook for the Group remains positive and the Group is well placed to benefit from the structural drivers of growth in the UK, German and Austrian consumer credit markets.

Commenting on the results, Colin Storrar CFO said:
“I am delighted to announce impressive results for the Group this quarter. Cash EBITDA performance in the quarter is particularly pleasing, as is the step change in medium-term, forward flow acquisition visibility. The combination of our H1 trading, along with the future NPL acquisitions we’ve secured to date, means we look to the second half of 2016 and beyond with optimism.”

 

 

 

For further information, please contact:
Investor Relations enquiries:
Jon Trott, Head of Investor Relations
Telephone: +44 7551 153 793
Email: investors@garfunkelux.com

Media enquiries:
UK:
Lisa Caswell
Telephone: + 44 7393 236 925
Email: MediaEnquiries@lowellgroup.co.uk

Germany:
Michaela Heitkemper
Telephone: + 49 201 102-1198
Email: pr@gfkl.com

About GFKL Lowell Group:
The GFKL Lowell Group was created in October 2015 following the merger of German and UK market leaders GFKL and the Lowell Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP). The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector. For more information on the Group, please visit our investor website: investors.garfunkelux.com.
For information on the individual companies, please visit:
www.gfkl.com
www.lowellgroup.co.uk

Non- IFRS financial measures
We have included certain non-IFRS financial measures in this trading update, including estimated remaining collections (“ERC”) and Cash EBITDA.
We present ERC because it represents our expected gross cash proceeds of the purchased debt portfolios recorded on our balance sheet (the “Purchased Assets”) over the 84-month, 120-month and 180-month periods. ERC is calculated as of a point in time assuming no additional purchases are made. ERC is a metric that is also often used by other companies in our industry. We present ERC because it represents our best estimate of the undiscounted cash value of our Purchased Assets at any point in time, which is an important supplemental measure for our board of directors and management to assess our performance, and underscores the cash generation capacity of the assets backing our business. In addition, the instruments governing our indebtedness use ERC to measure our compliance with certain covenants and, in certain circumstances, our ability to incur indebtedness.

ERC is a projection, calculated by our proprietary analytical models, which utilise historical portfolio collection performance data and assumptions about future collection rates, and we cannot guarantee that we will achieve such collections. ERC, as computed by us, may not be comparable to similar metrics used by other companies in our industry.

We present Cash EBITDA because we believe it may enhance an investor’s understanding of our profitability and cash flow generation that could be used to service or pay down debt, pay income taxes, purchase new debt portfolios and for other uses, and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies generally. In addition to ERC, our board of directors and management also use Cash EBITDA to assess our performance. Cash EBITDA is not a measure calculated in accordance with IFRS and our use of the term Cash EBITDA may vary from others in our industry. For a reconciliation of Cash EBITDA to operating profit, see the “Reconciling the Q2 Interim Numbers to this Presentation” page within the Investor Presentation document.

ERC and Cash EBITDA and all the other non-IFRS measures presented have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under IFRS.

LOWELL GFKL GROUP ANNOUNCES CONTINUED STRONG TRADING DURING FIRST QUARTER 2016

Lowell GFKL Group, a European leader in credit receivables management, today announces continued strong performance during the first quarter ended 31 March 2016.

Financial Highlights

• Cash EBITDA growth of 13% to £59m for the three months to March 2016
• NPL portfolio acquisitions up 79% year-on-year to £71m
• In excess of £140m of portfolio acquisitions already closed and contractually committed for 2016
• Continued diversification of mix and sector evident with 34% of acquisitions through Forward Flow agreements and 61% of acquisitions across Financial Services
• 120 month Estimated Remaining Collections (ERC) up 32% to £1.45bn, and 7% higher than 2015 year end

Operational Highlights

• Integration of GFKL and Lowell continues to make strong progress
• Continuing to extend our value proposition to our clients by developing our one stop shop offering in all countries where we operate
• Maintaining our disciplined approach to pricing and investment
• Compliance with the regulatory environment and focus on treating customers fairly to achieve the right customer outcomes remain at the forefront of our business
• Acquisition of IS Group Management GmbH expected to close by the end of May subject to anti-trust approvals
• Performance of Lowell Solicitors continues to exceed initial expectations

Outlook

The outlook for the Group remains positive and the Group is well placed to benefit from the structural drivers of growth in the UK, German and Austrian consumer credit markets.

Commenting on the results, Colin Storrar CFO said:

“We are delighted to present another strong set of results for this first quarter. The structural drivers for market growth exist across all of our markets. The integration of GFKL and Lowell continues to make good progress and with the acquisition of IS Inkasso Service in its final stages, the outlook for the future remains positive.”

 

For further information, please contact:

Investor Relations enquiries:

Jon Trott, Head of Investor Relations
Telephone: +44 7551 153 793
Email:  investors@garfunkelux.com

Media enquiries:

UK:
Karen Leech
Telephone: + 44 113 285 6595
Email: MediaEnquiries@lowellgroup.co.uk

Germany:
Michaela Heitkemper
Telephone: + 49 201 102-1198
Email: pr@gfkl.com

 

Lowell GFKL Group:

The Lowell GFKL Group was created in October 2015 following the merger of German and UK market leaders GFKL and the Lowell Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP). The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector. For more information on the Group, please visit our investor website: investors.garfunkelux.com.

For information on the individual companies, please visit:

www.gfkl.com
www.lowellgroup.co.uk.

Non- IFRS financial measures
We have included certain non-IFRS financial measures in this trading update, including estimated remaining collections (“ERC”) and Cash EBITDA.

We present ERC because it represents our expected gross cash proceeds of the purchased debt portfolios recorded on our balance sheet (the “Purchased Assets”) over the 84-month, 120-month and 180-month periods. ERC is calculated as of a point in time assuming no additional purchases are made. ERC is a metric that is also often used by other companies in our industry. We present ERC because it represents our best estimate of the undiscounted cash value of our Purchased Assets at any point in time, which is an important supplemental measure for our board of directors and management to assess our performance, and underscores the cash generation capacity of the assets backing our business. In addition, the instruments governing our indebtedness use ERC to measure our compliance with certain covenants and, in certain circumstances, our ability to incur indebtedness. ERC is a projection, calculated by our proprietary analytical models, which utilise historical portfolio collection performance data and assumptions about future collection rates, and we cannot guarantee that we will achieve such collections. ERC, as computed by us, may not be comparable to similar metrics used by other companies in our industry.

We present Cash EBITDA because we believe it may enhance an investor’s understanding of our profitability and cash flow generation that could be used to service or pay down debt, pay income taxes, purchase new debt portfolios and for other uses, and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies generally. In addition to ERC, our board of directors and management also use Cash EBITDA to assess our performance. Cash EBITDA is not a measure calculated in accordance with IFRS and our use of the term Cash EBITDA may vary from others in our industry. For a reconciliation of Cash EBITDA to operating profit, see the “Reconciling the Q1 Interim Numbers to this Presentation” page within the Investor Presentation document.

ERC and Cash EBITDA and all the other non-IFRS measures presented have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under IFRS.

GFKL Lowell

Lowell GFKL Group, a European leader in credit receivables management businesses, today announces strong growth for the period ended 31 December 2015. The first annual results since the combination of Lowell and GFKL demonstrate the successful first phase integration of the two businesses with sustained growth, high returns and visible earnings. The Group also announces the acquisition of IS Inkasso Service, the Austrian market leader in third party collections.

Financial Highlights
• Strong year-on-year growth reported across key income and balance sheet metrics
• Group year-on-year Cash Income growth of 13% and Cash EBITDA growth of 18% to £212m, largely driven by higher Non Performing Loans (NPL) cash collections
• £250m invested in NPLs across multiple sectors; up 43% year-on-year
• Investment diversification continues with 295 NPL Portfolios acquired with a face value of £2.8bn
• FY16 acquisition profile supported by 37 Forward Flow agreements – up 28% year-on-year
• High Estimated Remaining Collection (ERC) accuracy with the Group achieving 100.2% of the collections forecast for the period.
• 120m ERC growth of 24% to £1.4bn

Operational Highlights
• Successful first phase integration of two of the leading players in the largest European credit markets
• James Cornell appointed sole Group CEO; Kamyar Niroumand appointed Chairman of the Supervisory Board of GFKL and Senior Advisor to the Group Board
• GFKL minority shareholder squeeze out successfully completed
• Lowell retained and improved its ‘Exceptional’ rating from Investor in Customers
• Lowell Solicitors Limited went live in H2-15 and is outperforming initial expectations

Commenting on the results, Colin Storrar, CFO, said:

“We are pleased to present such a strong set of financial results for 2015; the first annual results since the successful combination of two of Europe’s leading credit receivables management businesses. The integration of Lowell Group and GFKL offers clients the most comprehensive debt management and data analytics service in Europe and, with the support of our partners Permira Funds and Ontario Teachers’ Pension Plan, we look forward to driving the business forward together.”

Acquisition of IS Inkasso Service
Lowell GFKL Group has entered into agreement to acquire IS Group Management GmbH, trading as IS Inkasso Service. Closing is expected at the end of May subject to anti-trust approvals. IS Inkasso Service is the Austrian market leader in third party collections (3PC) with a strong Swiss business.

It adds a third, highly attractive market position to the Lowell GFKL Group which is an important step towards becoming a pan-European leader in credit receivables management. It also extends the diversification of business mix in the Group’s portfolio.

Context and Insights
The combination of Lowell and GFKL is progressing well with the successful completion of the first integration steps and the appointment of James Cornell as sole Group CEO. The appointment of Kamy Niroumand, CEO of GFKL for the last three and a half years, to the Supervisory Board of GFKL and as Senior Advisor to the Group Board ensures the continuity of key client relationships and access to his extensive experience and expertise.

With the visibility of forward flow agreements, together with the Group’s diversified origination capabilities across different sectors and across the two largest consumer credit markets in Europe, the pipeline for future portfolio acquisitions is encouraging.

Compliance with the evolving regulatory environment and focus on treating customers fairly to achieve the right customer outcomes, continues to be at the forefront of this business.

The focus on creating value remains paramount and the Group is dedicated to building long-term strategic relationships with clients by delivering the best product and service mix across the end to end credit management cycle. It is a source of pride that the Group’s long term commitment to building good relationships with customers has been recognised by the award, once again, of an ‘Exceptional’ rating from Investor in Customers, along with an improved performance on all measures.

The Group believes that sharing best practice is vital to customer experience and customer growth. The approach is to build a strong platform for Europe expansion whilst maintaining a disciplined approach to pricing and investment.

Outlook
Overall, the outlook for the Group remains positive and the Group is well placed to benefit from the structural drivers of growth in the UK, German and now Austrian consumer credit markets.

 

For further information, please contact:
In the UK:
Karen Leech
Telephone: + 44 (0) 113 2856595,  e-mail: MediaEnquiries@lowellgroup.co.uk
In Germany:
Michaela Heitkemper
Telephone: + 49 201 102-1198,  e-mail: pr@gfkl.com

Lowell GFKL Group:
The Lowell GFKL Group was created in October 2015 following the merger of German and UK market leaders GFKL and the Lowell Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP). The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector. For more information on the Group, please visit our investor website: http://investors.garfunkelux.com. For information on the individual companies, please visit https://www.gfkl.com and http://www.lowellgroup.co.uk.

Non- IFRS financial measures
We have included certain non-IFRS financial measures in this annual report, including estimated remaining collections (“ERC”) and Cash EBITDA.

We present ERC because it represents our expected gross cash proceeds of the purchased debt portfolios recorded on our balance sheet (the “Purchased Assets”) over the 84-month, 120-month and 180-month periods. ERC is calculated as of a point in time assuming no additional purchases are made. ERC is a metric that is also often used by other companies in our industry. We present ERC because it represents our best estimate of the undiscounted cash value of our Purchased Assets at any point in time, which is an important supplemental measure for our board of directors and management to assess our performance, and underscores the cash generation capacity of the assets backing our business. In addition, the instruments governing our indebtedness use ERC to measure our compliance with certain covenants and, in certain circumstances, our ability to incur indebtedness. ERC is a projection, calculated by our proprietary analytical models, which utilize historical portfolio collection performance data and assumptions about future collection rates, and we cannot guarantee that we will achieve such collections. ERC, as computed by us, may not be comparable to similar metrics used by other companies in our industry.

We present Cash EBITDA because we believe it may enhance an investor’s understanding of our profitability and cash flow generation that could be used to service or pay down debt, pay income taxes, purchase new debt portfolios and for other uses, and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies generally. In addition to ERC, our board of directors and management also use Cash EBITDA to assess our performance. Cash EBITDA is not a measure calculated in accordance with IFRS and our use of the term Cash EBITDA may vary from others in our industry. For a reconciliation of Cash EBITDA to operating profit, see the “Reconciling the Statutory Accounts to this Presentation” section of this document.

ERC and Cash EBITDA and all the other non-IFRS measures presented have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under IFRS.