AnaCap purchases Cabot Financial from Citi

AnaCap Financial Partners, the European private equity firm that specializes in the financial services sector, acquired Cabot Financial, from Citi. Cabot Financial is a consumer debt purchasing firm.

The purchase will create the UK’s biggest debt purchasing and collection business as AnaCap will integrate Cabot Financial with Apex Credit Management, another market leading debt purchasing and collections agency that is already owned by AnaCap’s funds.

Cabot Financial purchases consumer debt from financial institutions and other credit providers that no longer wish to manage that debt internally. Apex manages debt on a contingent basis and also purchases debt from credit providers no longer wanting to manage it internally.

AnaCap is joined in the purchase by Morgan Stanley Alternative Investment Partners and Partners Group.

Glen Crawford, Group Managing Director at Cabot Financial, reiterated that both Apex Credit Management and Cabot Financial have an excellent reputation for customer care and joining forces marks a considerable investment.

Neil Clyne, CEO, of Apex Credit Management added that customer care and quality of service is a real differentiator in this sector and that is something the two companies are committed to building on. The combining of the two companies will offer an especially strong proposition to customers, he said.

Fabrizio Cesario, Managing Director, from AnaCap said the UK’s debt management sector is very fragmented and he believes that creating a large scale provider will facilitate a superior level of service for both corporate customers and consumers.

According to Cesario, a bigger provider can make the substantial investments in IT and staff required in ensuring continued excellence in regulatory compliance as well as providing consumers with higher standards of service and support.

AnaCap describes Cabot Financial and Apex Credit Management as “highly complementary” and notes that the deal will give both organizations the opportunity to provide a wider range of services to their corporate client base.

In a statement, Citi reiterated its delight to have entered into this agreement with AnaCap. This transaction demonstrates continued progress in Citi’s strategy to divest the non-core assets in Citi Holdings while focusing on its core banking strategy.

The debt purchasing and debt collection market is expected to benefit from the long term trend of banks, telecom companies, utilities and other consumer credit providers outsourcing parts of their debt management process.

This trend is partly being driven by the realization that specialist businesses, such as Cabot and Apex can offer a more tailored approach to customers in managing outstanding debt.

18th April 2011