Electra Private Equity PLC (“Electra”) today announces that it has entered into a binding agreement to sell its interest in specialist credit card provider, SAV Credit (“SAV”), to Värde Partners (“Värde”) in a transaction with a total value of £472 million. This deal is subject to competition clearance.
On completion this will result in Electra receiving gross proceeds in excess of £40 million. Electra’s portfolio, including SAV, will be revalued on 30 September 2011, however, based on the 31 March 2011 valuation of SAV, this would imply an uplift in diluted NAV per share of 56.2p, and a return of 1.7x on cost.
SAV is the UK’s leading specialist credit card provider, managing approximately 500,000 credit card accounts with more than £600 million in credit card assets. Electra first invested in SAV in October 2006 alongside existing investor Palamon Capital Partners. Since then SAV has completed a number of follow-on investments with the result that it has more than doubled the size of its receivables portfolio. The company acquired the Marbles credit card portfolio from HSBC in October 2007 and, with the financial backing of Värde, purchased Citigroup’s credit card portfolio in March 2010.
David Symondson, Deputy Managing Partner of Electra Partners, the manager of Electra Private Equity PLC, said:
“This is a perfect example of crisis breeding opportunity: for SAV it was finding investors willing to support and fund the growth of a non-standard credit card business during one of the most challenging operating environments we have seen; and for Electra Partners, management and fellow investors it was the decision, in anticipation of the credit crisis, to switch the strategy successfully from organic growth to portfolio acquisition.”
James Corcoran, CEO of SAV Credit Limited, said:
“Electra have been very supportive investors, helping SAV to build the UK’s leading specialist credit card business. We look forward to the future with great confidence and working with Värde to realise the considerable growth opportunities that lie ahead of us.”
Electra Partners refers to Electra Partners LLP acting on behalf of its client Electra Private Equity PLC.