Encore Capital Group, Inc. (Nasdaq: ECPG) today announced that it has completed its acquisition of the remaining interest in Cabot Credit Management (Cabot), one of the largest credit management services providers in Europe and the market leader in the United Kingdom and Ireland. Cabot is now a wholly owned subsidiary of Encore. The transaction is expected to be accretive to Encore earnings in 2018 and beyond, and Encore’s earnings per share growth is expected to accelerate to at least 20 percent in 2018.
“The completion of the acquisition of Cabot is a transformational event for Encore that solidifies our global leadership position in our sector, and represents a natural continuation of the path we embarked on when we first acquired a stake in Cabot in 2013,” said Ashish Masih, President and CEO of Encore. “Cabot has successfully grown and expanded over the course of the past five years, and we view it as the best platform to take advantage of the significant, attractive opportunities to deploy capital in Europe.”
The Cabot transaction is part of Encore’s ongoing diversification strategy. While the U.S. market is currently strong, these investments in other geographies are expected to reduce the volatility in Encore’s overall business over time. The company’s European business, led by Cabot, has developed several recovery product specialties, including those related to credit cards, loans, mortgages, REO, SME debt, telco, utilities debt, auto and IVAs, as well as servicing and BPO capabilities.
“Since Encore’s initial investment in Cabot, we’ve been able to significantly increase our scale, improve our operational capabilities and achieve meaningful efficiency gains,” said Ken Stannard, Chief Executive Officer of Cabot. “This transaction is great news for Cabot employees, clients and customers alike, as it strengthens our ability to achieve our growth goals with a partner who deeply understands our business and shares our commitment to treating people fairly and respectfully.”
The initial agreement was announced on May 8, 2018.