Encore Capital Group has completed its acquisition of the remaining interest in Cabot Credit Management.
As a result, Cabot is now a wholly-owned subsidiary of Encore.
Encore has purchased the remaining interest in Cabot held by existing shareholders, including JC Flowers & Co, for five million shares of Encore common stock and £175.5m.
In 2013, Encore made an initial investment in Cabot, acquiring 43 percent of the business. It said its decision to acquire the remaining interest “reflects Cabot’s strong performance” since.
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.”
“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 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.”